European Central Bank President Lagarde urges deeper capital markets integration and more EU qualified majority voting to bolster competitiveness

In a speech in Dublin marking the award of the Sutherland Leadership Award, European Central Bank President Christine Lagarde argued that Europe is operating in an “inverted world” of greater geopolitical rivalry, protectionism and uncertainty, and should respond by “cooperat[ing] to compete” through stronger economic integration and more effective collective decision-making. Lagarde highlighted economic risks for Europe stemming from trade headwinds and uncertainty, noting that Europe’s trade-to-GDP ratio is about twice that of the United States and that an index of trade policy uncertainty is more than eight times its average level since 2021. She called for integrating Europe’s capital markets to channel savings into investment and for removing internal barriers in the Single Market so firms can scale more easily, pointing to the Letta and Draghi reports and the European Commission’s Competitiveness Compass as a roadmap with milestones that should be implemented urgently. She also argued that Europe needs to “structurally change” how decisions are made, criticising the ability of a single veto to block collective action and advocating greater use of qualified majority voting so Europe can act as a single entity in key areas.