【By Guan察者网, Yuan Jiaqi】

According to the New York Times, on the 10th, Joachim Nagel, President of the German Central Bank and a member of the European Central Bank's Executive Board, said in an interview in London that European governments must not be "complacent" on issues such as tariffs and competition with China.

The report states that in recent years, China has become a strong competitor for Germany. Previously, countries purchased cars, high-tech machinery, and other products from German companies, but now Chinese companies are capable of supplying these products, and prices are generally lower. According to data from the automotive industry analysis firm JATO Dynamics, in the first half of this year, the sales of Chinese car brands in Europe nearly doubled, with sales volumes approaching that of Mercedes-Benz in Europe.

Nagel stated that the increasingly fierce competition with China has "woken up all European companies" (an eye-opener). However, he added that Europe is in a favorable position in trade negotiations with China because "China's demand for Europe is greater than Europe's demand for China." He claimed, "Our most important market is Europe, not China."

American media also pointed out that the difficulties faced by German exporters are also due to a series of measures taken by US President Trump.

According to the report, the tariff policies implemented by the Trump administration, as well as the wavering commitments to Ukraine in the Ukraine-Russia conflict, have made European governments uneasy. These developments seem to have prompted European leaders to accelerate economic integration within the European continent and increase defense spending. Some people also see the opportunity for the euro, with its market of 350 million people, to become a safe haven for investors.

Nagel pointed out that although the EU and the US have reached a consensus on the framework of a trade agreement, which has eased some of the impact of tariffs, Europe still needs to maintain a sense of urgency. He said that Europe is facing heavy debt burdens, government budget pressures, and "uncertain political situations."

"When you are in a hurricane, the eye of the storm is always quiet," Nagel said during the interview. He also added that this might be the current situation of the European economy.

From 2023 to 2024, the German economy continued to shrink, and exports, once a reliable growth engine, are no longer as strong as before. At the same time, France, the second-largest economy in the EU, is caught in political difficulties, struggling to deal with a fragile financial situation.

"Complacency is definitely the wrong attitude," Nagel emphasized. In his view, the key to solving the problem lies in deepening European integration. At the same time, he also warned that we should not underestimate Europe's ability to adapt to challenges.

This week, the five major German economic research institutions released a joint forecast report, pointing out that the additional tariffs imposed by the US have caused serious shocks to the global economy, and weak external demand will suppress German export growth. It is expected that the German economy will grow by only 0.2% in 2025.

The German Federal Ministry of Economics and Climate Action stated in a statement that unlike the typical recovery model of Germany in the past, this round of economic recovery is not relying on foreign trade, but rather on domestic demand, especially consumption and public investment.

Minister of the Federal Ministry of Economics and Climate Action, Katrin Eder, pointed out that in the coming years, Germany's economic growth will largely rely on high government spending, including special funds for infrastructure and defense investment, but this requires the implementation of structural reforms.

In recent speeches, Nagel has strongly advocated a series of policies he believes Germany urgently needs to take, including simplifying administrative procedures, increasing the labor force, increasing technological investment, and lowering energy prices.

This summer, the German federal government announced plans to borrow more than 100 billion euros in 2025, with the funds mainly invested in military and infrastructure construction. However, the patience of the German public for the speed of policy effectiveness seems to be gradually running out, and Nagel also frankly stated, "We must speed up our actions."

The report also mentioned that the core issue being discussed by central bank governors around the world is currently happening in Washington: the Trump administration has repeatedly criticized the independence of the Federal Reserve, trying to pressure Fed officials to lower interest rates.

Regarding this matter, Nagel mentioned that the predecessor of the German Central Bank was established in 1948 by Western allies such as the United States, the United Kingdom, and France who occupied West Germany, laying the foundation for the rapid growth and reconstruction of the German economy after World War II.

"We are very grateful to the United States, as they proposed the visionary idea of 'establishing an independent central bank' at that time," Nagel further said, "which is why we were so worried when we saw the scene of (the attack on the Federal Reserve) over the past 10 months." He added, "Recent attacks on the Federal Reserve are unfair."

Regarding the strengthening of the euro, Nagel said he is not worried. With the euro-dollar exchange rate recently maintaining around 1.17, he said, "I won't say it's irrelevant, we need to pay attention, but it's not a major issue."

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Original: https://www.toutiao.com/article/7559559479176610304/

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