In 2025 in the eurozone and the “requests” that make it economically “harder” than 2024

ECB head Mrs Lagarde welcomed in 2025 with some statements, rather optimistic. He promised a final victory over inflation. And therefore, he implied that the interest rate cost of money does not have to stay as high as it is to date. As he argued “We have made significant progress in 2024 in reducing inflation and we hope that 2025 is the year in which we will reach the goal, as expected and as planned in our strategy… Of course we will continue our efforts to ensure that inflation is stabilised sustainable in this medium-term target of 2% ….” A sigh of relief for 2025? One might say yes, if these statements had not been accompanied by a few 24-hour difference from the statements made by Mr Klaus Knott, a Dutch Central Banker who had relatively recently made an interesting trip to China. There he had a meeting with Chinese President C. Xinping. Mr Knott’s conclusion from his very important meeting with the Chinese President was that “the Chinese will start offering their products to Europe at ever lower prices”. His statement was made in an interview published in the Dutch newspaper Volkskrant. And he explains, “We already see this happening in the steel market,” he said. Which means that “This way, China exports its deflation to us…”. Mr. Knott added President Shi Zinping “given the clear impression that China is ready for anything that can come from the US…”. He has, of course, avoided adding that this is not the case for the eurozone… If we put these two statements by Mrs. Lagarde and Mr. Knott, next door, the conclusion is simple. The Eurozone in 2025, if President Trump appears consistent with his statements to date and promotes the tariff storm he has announced, then the Eurozone will find itself among two crushing waves for its already asthmane economy. One U.S. suffocatingly restrictive of its exports and another impossible to deal with, deflationary exports from China. And all this in a new environment of more expensive and larger energy costs due to the interruption of the flow of Russian gas and their replacement with more expensive American origin. On 8 January he sails from the U.S. from the new Venture Global terminal in Plaquemines, Louisiana and is expected to sail to unload at the German port Brunsbüttel the first LNG truck. The first conclusion is that the deflation of Chinese products in the European economy is certainly disrupting inflationary pressures on structural inflation in the euro area. At the same time, however, the European industry, with the car industry first on the list, will suffer this unreachable competitive pressure within the European market, when it suffers at the same time and at the same time the consequences of the increase in American tariffs. In such circumstances, the last thing Mrs. Lagarde could say is that she will keep the interest rates high… After all, Mrs Lagarde in an economy which raises the enormous burden of increased public and private debt, the minimum she could do is to reduce debt service costs by further reducing interest rates. But in an economy that in 2025 will be crushed by Chinese exports and tariff bans from Washington, is it sufficient to reduce the cost of money, even at nominal inflation levels, to breathe? When natural gas (i.e. electricity) is to be more expensive and is to bear increased costs of ‘defensive’ costs (NATO)? And even in societies whose purchasing power of income has been dramatically compressed by the high prices left behind on the supermarket shelves by the inflation of the two to three previous years? Apparently Mrs. Lagarde with her statements the other day, wanted to give an optimistic message about 2025 and leave the difficult, that is, the truth, about later…