“President Trump’s approach to trade and global alliances may be a wake up call for Europe. The region is signalling a clear and a historical shift, which will require target measures to boost growth efficiently.”
Europe is facing major economic and security challenges. The European Commission (EC) has started translating the Draghi report’s recommendations into effective proposals.
Real interest rates have been on a secular decline since the mid-1980s but have corrected sharply higher since the Covid pandemic, higher inflation and the end of central banks’ Quantitative Easing (QE). Now, public debt is much higher and there are new demands for funding (e.g., for defence and net zero ambitions), which should argue for structurally higher long-term interest rates.