He European Central Bank cut the interest rates Thursday for the seventh time to counteract concerns about the growth economic fed by the tariff offensive of the US president Donald Trump.
The bank’s measure should support the Economic activity in the 20 countries that use the euro by making the credit Be more affordable for consumers and companies.
The president of the ECB, Christine Lagardehe said at a press conference after the decision that “the great escalation in the commercial tensions Global and the uncertainty associated will probably reduce the growth In the euro zone when exported stops. “
“And this could drag towards below Investment and consumption, “he said.
Reference rate
The council in charge of adjusting the rates decided at the bank’s headquarters in Frankfurt lower the reference rate in a room of percentage point to 2.25%. The ECB has been reducing the rates constantly after raastically uploading them to combat the inflation From 2022 to 2023.
Now that inflation has yielded, concerns about the growth They have taken prominence. The economy in the 20 countries that use the euro grew a modest 0.2% in the last three months of 2024. The inflation It was 2.2% in March, near the goal objective of 2%.
Analysts already expected the cut given the sudden impact on the perspectives of growth of the Eurozone after Trump’s announcement on April 2 to upload the duty to the assets of other countries from 10% to 49%. The European Union faces a 20%tariff.
At the last meeting of the bank, on March 6, Lagarde raised the possibility of a “pause“In the bank’s feat cuts series. But that option was practically eliminated with the announcement of Trump.
The reference rate from the guide bank the credits throughout the economy. Lower interest rates mean cheaper loans to buy goods ranging from homes to factory equipment. That supports spending, business investment and hiring.
Trump tariffs
Trump suspended the duty for 90 days, but the possibility of the 20% tariff he has proposed for Europe left Economists and politicians concerned that the highest costs weigh on business activity, and lead to a growth slower or even a recession if that tax is implemented.
USA It is the largest shopping partner in Europe, with an exchange of about 4.4 billion euros (5,000 million dollars) in goods and services.
The uncertainty It is another factor that could slow the economy, since pause Trump for talks Leave uncertain where the tariff rate will really be established. Companies can postpone decision making if they don’t know what their costs will be.
European Union officials have offered to Trump a “zero by zero” option, where both parties would eliminate the duty On industrial goods, including cars.
But Trump has said that this will not be enough and has raised the possibility that Europe imports large additional amounts of liquefied natural gas from USA.
The Economists of Berenberg Bank think that by mid -year some of the duty They will be negotiated, ending around 12%. However, that is still around 10 percentage points higher than duty Average before Trump.
In addition to that, there is a 25% separate tariff on cars, aluminum and steel from all countries. The car tariff will hardly affect the prominent Automotive industry from Europe, and Trump has indicated that this is not subject to negotiation.
Lagarde said the “cloud of uncertainty“About the duty It meant that decisions about rates in the future They would have to take case by case, depending on what happens during the 90 -day tariff truce.
“There is one negotiation Ongoing, the Players Around the tables they have declared their position, proposals have been made, at least on one side, but all that could change, “he said.
“There is a degree of unpredictability that addition to the uncertainty“
