Europe's Post-War Growth Model Unraveling, Lagarde Warns

Christine Lagarde has sounded the alarm on Europe's post-war economic growth model. According to her, this formula is no longer sustainable due to several factors.

The old playbook rested on three pillars: global trade, cheap energy for factories, and a stable rules-based order guaranteed by the United States. However, trade barriers are rising with over 2,500 new restrictions introduced worldwide in the past year alone.

The US has also threatened to leave NATO and grab territory by force, further straining Europe's economy. Lagarde warns that this security uncertainty is making businesses focus on resilience rather than efficiency, which is expensive.

She emphasizes that Europe cannot afford to miss out on the digital revolution again, citing the existing market gap between European and American companies.