European Central Bank (ECB) President Christine Lagarde stated at the World Economic Forum that Europe's post-war growth model is facing disintegration, with its three pillars—expanding global trade, mid-range manufacturing prowess, and a stable rules-based order—all weakening. She identified increased global trade restrictions (over 2,500 last year), intensified manufacturing competition from China, the disappearance of cheap energy (including Russian gas) leading to higher EU energy prices than in the US and China, and geopolitical tensions as the main reasons.

Despite this, Lagarde emphasized that Europe still possesses the world's largest network of trade agreements, world-class manufacturing capabilities (such as lithography and precision optics), a highly skilled workforce, and an integrated market of 27 member states and 450 million consumers. She noted that the Eurozone economy grew by 1.5% last year and 0.4% in the second quarter of this year, primarily driven by domestic demand. Lagarde called for Europe to better leverage the size of its domestic market and overcome the fragmentation of its single market and capital markets to avoid repeating the mistake of missing the first digital revolution and to seize the opportunities presented by artificial intelligence (AI). She also mentioned that capital market fragmentation causes European startups to lag behind their US counterparts in later-stage financing and has led approximately 12% of EU scale-ups to relocate outside the EU, particularly to the United States.