European Central Bank President Christine Lagarde warns of "extreme uncertainty" and calls for a relay of fiscal measures and reforms

According to the Zhitong Finance APP, against the backdrop of escalating global trade tensions and the impact of U.S. tariffs on Eurozone exports, the European Central Bank announced on Thursday a 25 basis point cut to its main interest rates. This marks the seventh rate cut by the bank in the past year, aimed at boosting the weak Eurozone economy through a more accommodative monetary policy. European Central Bank President Christine Lagarde stated at the post-meeting press conference that the decision to cut rates was unanimously approved, although different options were discussed during the meeting, and no member advocated for a more aggressive 50 basis point cut, indicating a cautious approach by the monetary policy committee amid high uncertainty. Lagarde pointed out that U.S. tariff measures have posed a significant "negative demand shock" to the Eurozone, and their suppressive effect on economic growth has already become apparent, although the ultimate impact on inflation will require time to observe. Meanwhile, global trade disruptions continue to escalate, exacerbating market uncertainty and potentially exerting further downward pressure on Eurozone inflation through multiple channels such as falling energy prices, euro appreciation, and declining export demand. She specifically noted that exports from countries with overcapacity shifting to the Eurozone market could also intensify internal industrial competition. Additionally, Lagarde warned that the intensification of global trade frictions and the resulting uncertainty are significantly increasing the downside risks facing the Eurozone economy, with trade contraction directly impacting export performance and subsequently suppressing business investment and consumer spending. If financial market sentiment further deteriorates, financing conditions may tighten, and the risk appetite of businesses and households may decrease, exacerbating the economic slowdown. Despite this, Lagarde welcomed increased spending by some Eurozone countries on defense and infrastructure, believing it would provide some support for economic growth. However, she emphasized that relying solely on monetary policy is insufficient to address current challenges, and fiscal policy and structural reforms need to work in tandem. She called on member countries to accelerate reforms aimed at enhancing productivity, competitiveness, and economic resilience to strengthen the overall risk resistance of the Eurozone. Faced with the dual pressures of escalating external shocks and limited internal policy space, Lagarde admitted that the current economic outlook is "shrouded in extreme uncertainty," and the future policy path for the Eurozone will still be constrained by multiple variables, requiring space for further policy adjustments while maintaining stability