Abhay Singh
The possibility of a second Trump administration, according to Eurogroup chief Paschal Donohoe, is a catalyst for the EU to get ready by reducing its reliance on the US economy.
The Irish minister for public expenditure stated in an interview with Bloomberg Radio that although the American people will select their next leader, the area should be prepared for any scenario.
“We need to continue to deepen our own economic autonomy,”
Donohoe said “Donald Trump has outlined a very different agenda with regard to tariff levels and with regard to trade, We need to continue to deepen our own economic autonomy, to deepen the performance of our economy and the strength of our economy here in Europe, so that we’re in a stronger position to deal with the kind of changes that may come out of America.”
The comments are in line with EU officials like Christine Lagarde, who warned of “harsh decisions” if Trump returns to the White House and advocated for a capital markets union to strengthen Europe in anticipation of Trump’s second term.
“It’s a really serious issue that could develop across next year, I’m confident we’ll be well positioned to be able to continue to develop the relationship with the US, but within a way that from a European perspective is stronger.” Donohoe added.
Polls show the November elections to be a tight race
According to polls, the elections in November will be quite close. In seven key states, Vice President Kamala Harris has erased President Trump’s lead among voters, according to a July Bloomberg News/Morning Consult survey. The Democrat currently leads 48% to 47%, a statistical dead heat.
Donohoe, chairing euro-area finance chief meetings, expressed confidence in indebted countries like France’s ability to manage deficits despite political turmoil.
He said “Of course, in order for a to be budget passed within the French Parliament, there needs to be a government in place and there needs to be the political consensus to implement that budget, That work is underway, and I’m sure will only intensify in the aftermath of the Olympics.”
Donohoe conceded that investors are and will continue to be closely monitoring the public budgets of the eurozone.
He added “We all appreciate this is something the financial markets do monitor and do respond back to in terms of the cost of borrowing, All finance ministers do recognize that that, of itself, will create a dynamic that allows borrowing across next year in particular to come down gradually and to come down credibly.”
Donohoe expects the EU’s new capital markets commissioner to draft a “strengthened action plan” on the capital-markets union in early next year, citing a majority in the European Parliament and confidence that signs of ambition will emerge when the commission is established within months.
He also said thatMichael McGrath, Ireland’s choice to be the nation’s next EU commissioner, “would be a great candidate” for the position of capital markets commissioner or “any senior role.”
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