Lagarde Warns Europe's Economic Model Eroding, Urges Single Market Leveraging

European Central Bank President Christine Lagarde warned that Europe's post-war economic model is 'eroding' and unlikely to return in its previous form. Speaking at the World Economic Forum in Geneva, she cited three pillars of Europe's economic success as weakening: expanding global trade, mid-technology manufacturing, and a stable, rules-based global order underpinned by the US security umbrella.

Lagarde noted that Europe is roughly twice as open to trade as the United States but has seen more than 2,500 trade restrictions implemented globally last year. She also highlighted how China's rise up the value chain and the loss of relatively cheap Russian gas have eroded Europe's energy advantage.

The European economy grew by 1.5% last year, driven entirely by domestic demand, but Lagarde emphasized that Europe needs to make better use of its single market of 450 million consumers to build a new and more durable source of growth.