8 December 2025 – A few days ago, the President of the European Central Bank, Christine Lagarde, very accurately identified the main problems of the European Union and made it clear that the difficulties do not stem from imports into Europe – but rather from massive trade barriers within the EU’s own internal economic market.
ECB: Europe’s Economic Problems Are Homemade
The economic and political problems of the European Union are mainly self-inflicted, according to the speech by Christine Lagarde, President of the European Central Bank, at the 35th Frankfurt European Banking Congress.
Internal Trade Barriers Equivalent to 65% to 100% Tariffs
She quantified the trade barriers within the EU’s internal market as an equivalent tariff rate of 65% for goods and 100% for services – the result of an ECB report that will appear in the upcoming 8th edition of the ECB Economic Bulletin.
The report, titled “What is the untapped potential of the EU Single Market?”, stresses that these “tariff equivalents” should be understood as estimated trade-policy friction losses rather than actual, politically imposed duties. They reflect a combination of political obstacles and structural or cultural factors, such as consumer preferences and differences in taste.
ECB Criticism: Europe’s Prosperity Not Built on Its Own Economic Market
Lagarde sharply criticizes the fact that Europe’s prosperity does not arise from its own internal market but has been built massively on exports and depends on them. Europe’s export-oriented investment behavior confirms this picture. Instead of investing in its domestic economy, 10% of European equity investments (approx. €6.5 trillion) are now in U.S. stocks. This increasingly ties Europe’s prosperity to America’s economic growth. And while Lagarde mentions the word “exports” six times in her speech, the word “imports” does not appear even once.
Distraction Strategy: The Bogeyman of Imports
Nevertheless, the EU and its Member States try to distract from their internal-market problems by invoking the bogeyman of imports. Unlike the United States, the EU does not have a homogeneous internal market. The per capita GDP of the poorest U.S. state, Mississippi, is only €1,524 lower than that of Germany, the largest EU Member State. Meanwhile, in the EU, the average gross monthly salary in Bulgaria (€617 per month) is just 12% of that of a Danish worker (€5,005 per month).
Tariffs on imported goods at the EU’s external borders therefore burden domestic industry, purchasing power, and the income of EU citizens far more than tariffs in the United States already do.
Reports from the U.S. repeatedly show that such tariffs lead to price explosions – why this is not recognized in the EU must, among other reasons, be due to the distorted worldview of Commissioners Šefčovič and Séjourné, who label other countries’ tariffs as bad while defining their own as good.
At the same time, European import tariffs – for example on steel or goods affected by the CBAM CO2 tax – also harm Europe’s export-driven prosperity. They raise prices for products both on the domestic market and on export markets.
Europe Does Not Have an Import Problem
But instead of addressing the increasingly cited and pressing problems of the EU internal economic market and using the key policy levers available there to stimulate the economy, Brussels seems more determined to continue fending off a non-existent external enemy.
Lagarde makes one thing very clear in her speech: Europe does not have an import problem. Europe has focused far too much on exports and has neglected its own domestic economy to a far greater extent. Ultimately, it is simply easier for the domestic economy to export than to sell its products and services on the internal and overregulated EU market.
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