Europe's Growth Model Eroding Amid Global Headwinds

European Commission President Christine Lagarde warns that Europe's post-war growth model is eroding due to changes in the international environment.

The three pillars of this model, expanding global trade, mid-tech manufacturing supported by cheap energy, and a stable rules-based global order, are weakening.

Lagarde points out that while Europe has the world's largest network of trade agreements, the EU is facing trade headwinds, with over 2,500 trade restrictions implemented globally last year alone.

She also notes that China's steady climb up the value chain has eroded European industry's comparative advantage in many sectors, and that cheap energy on which Europe relied is no longer available.