Banque de France Governor François Villeroy de Galhau: ‘Europe and America will either win together or fall together’

On 13 to 17 April, the Atlantic Council held its regular meeting of finance ministers, heads of central banks, and IMF and World Bank representatives. Banque de France Governor François Villeroy de Galhau spoke and answered questions at the meeting.

The speech by Mr. Villeroy de Galhau was full of optimism, but the figures he cited spoke for themselves and were rather disappointing for Europe.

Global economic growth reached 3.4 percent last year compared to a 2.8 percent IMF forecast – even though, also according to the IMF, U.S. trade policy reduced global GDP growth by roughly 0.6 GDP last year. Yet growth in the euro area was just 1.5 percent in the same period.

The volumes of world trade in goods and services rose by 5.1percent last year, supported by tariffs, AI-related trade, and by sustained consumer demand. European trade also proved resilient but kept lagging behind the global figures. Imports of euro area goods increased by one percent in 2025, while exports declined by 0.5%

According to François Villeroy de Galhau, the economic outlook remains quite uncertain, particularly for France, as the Middle Eastern conflict continues and adds upward pressure on inflation and downward pressure on growth worldwide.

The IMF has revised its reference forecast for global GDP growth downward by 0.2pp (to 3.1 percent), and global inflation upward by +0.6pp to 4.4 percent in 2026.

In the ECB macroeconomic projections published in March, all the three alternative scenarios – ranging from baseline to severe – point to lower growth and higher inflation.

Global imbalances are widening. The U.S. current account deficit as a percentage of global GDP reached -0.9 percent last year, while China’s surplus rose to 0.6 percent.

After citing these figures, François Villeroy de Galhau asked a question to the Atlantic Council audience: ‘How could it be that the main relative winner of a new trade regime would be China, and the main relative losers would be U.S. allies like the EU, the UK or Japan?’

IMF data point to challenges that protectionism cannot address. These are:

– too little consumption in China,

– too much fiscal deficit in the United States, and

– too little productive investment in Europe.

The recent U.S. Supreme Court decision to invalidate the 2025 tariffs caused a legal uncertainty. It results from possible substitution of the tariffs under other statutes, unsettled trade agreements, and uneven effects across trade partners, including Europe.

The head of the French Central Bank made the following conclusion about the nature of the European-U.S. relations:

‘We need each other – and we need predictability. And let me speak candidly here, as friends must speak when there are tensions. We need each other because the world we face is one of common shocks, common risks. We need predictability, for interdependence alone does not create trust.’

This appeal by François Villeroy de Galhau was essentially a call on colleagues in the global financial system and on Atlantic Council globalists to influence President Trump in order to make his policy more predictable.