After years of fluctuations in inflationstability has finally returned to the eurozone, according to the President of the European Central Bank (ECB), Christine Lagarde.
Speaking today (4.7.2025) on the German ARD television network (on the occasion of its official visit to Berlin to meet with the German Chancellor Martz), the ECB president pointed out that there were many crises and threats. “But on the price front, we are stable,” he added. The ECB is determined to maintain this stability. In June, inflation in the eurozone was 2.0% – the ECB’s target.
The central bank has already reduced its basic interest rate by two whole percentage points since June 2024 – to 2.0% more recently. Investors expect it to take a break at this month’s meeting. At the same time, there are still speculations to decline to 1.75% later this year.
Lagarde refused to commit to a future interest rate on Friday: “We will decide on our compass,” said ECB President, referring to the medium -term inflation target of 2.0%: “We will use all the tools we have at our disposal.”
Lagarde: Strengthening EU Single Market in response to Trump
Regarding the upcoming decisions on US tariff policy, Lagarde said: “This is definitely one of the main sources of uncertainty.” He added that it is important to prepare for different scenarios. The July 9th deadline set by US President Donald Trump, until the EU and other countries must conclude an agreement with the US to reduce duties, is quickly approaching. Following the mutual duties announced by Trump in April, the temporary additional duty will double from 10% to 20% if no agreement is reached by that date.
Lagarde stressed that, in addition to the issue of customs, the eurozone should reduce trade obstacles within the single market. While the eurozone is not overly regulated, there are too many regulations and legal requirements: “We need to reduce this a little,” the ECB president said.
“Certainly, the US is large, an important part and also an important trading partner for us. But what we need to do is cultivate our own garden here in our country, “said the head of the Central Bank. “We have enormous opportunities in Europe.” Goods, capital and people must be able to move freely within the community. Lagarde called for the internal barriers to be overcome and the standardization of licensing procedures and other national requirements.
European Union economic systems must become more effective and productive so that the euro can compete with the dollar as the world’s top currency, he noted. Politicians must do their research to ensure that there are economic conditions for it, he said, adding that the power of a currency always reflects the power of the economy.