The Conduct of ECB Monetary Policy Under International Uncertainty

This paper examines ECB monetary policy amid rising international uncertainty. We focus on three global risks: renewed trade protectionism, euro appreciation, and US fiscal fragility. Using inflation forecasts and survey data, we evaluate the ECB’s evolving policy framework. A potential US fiscal crisis poses risks but also creates an opportunity for Europe to supply a global safe asset. We argue that a European Debt Agency issuing common debt could mitigate contagion and enhance Europe’s financial sovereignty