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Mar 19, 2025
Headline: ‘Europeans are going to have to relearn to be angry’
Sub-headline: In an interview with ‘Le Monde,’ Pierre Wunsch, Governor of the National Bank of Belgium, believes that Europe, built on the single market and open trade, is ill-adapted to the fragmentation of the world.
Editor: I will attempt to provide The Reader- this reads almost like an Official Document, or even like the self-congratulatory tone of The Financial Times?
Pierre Wunsch, Governor of the National Bank of Belgium, has a 25-year-old son who recently asked him if World War III was on the horizon. “I thought it was excellent news that he asked me,” he said to Le Monde. Not that the central banker welcomes the possibility of war returning, obviously, but because he sees it as a sign that public opinion is really worried. “[Russian president Vladimir] Putin, represents a real threat and we absolutely must invest in our defense. But my big fear is that people won’t accept that, that they’ll say we should spend on something else,” he said. For him, procrastinating on European rearmament would represent a far greater risk: “If we’re not strong enough against Putin, that’s when there could be a risk of global escalation. Europeans are going to have to relearn to be afraid, relearn pride and, from time to time, relearn to be angry.”
Wunsch is not a military expert but a central banker (at the National Bank of Belgium since 2011, governor since 2019). Previously, he worked for nearly a decade at the Suez Group and served in right-wing ministerial cabinets. When he speaks out on tensions with Russia, it is through the prism of economics. The Russian threat and the potential abandonment of American protection will require heavy budget spending in Europe. “But there’s no such thing as free money falling from the sky,” he said. He therefore believes that very difficult budgetary choices are looming just about everywhere in Europe and that people need to be prepared for them: “We’ll either have to cut spending, or raise taxes.”
Editor: Its not as if this sentence is of no interest : ‘Pierre Wunsch, Governor of the National Bank of Belgium, has a 25-year-old son who recently asked him if World War III was on the horizon’ as a kind of bridge, yet what follows reads like a confession of impotence, tinctured in the despondency of a banker!
Similarly, rewriting European rules to cope with this law of the strongest is proving tricky. “The single market operates with clear, predictable rules… Now we’re entering a more complex equilibrium, with industrial policy in certain areas, strategic autonomy issues… The question then becomes: who decides?” Should these powers be transferred to Brussels, at the risk of a democratic deficit? Or leave them to the member states, risking a cacophony of ideas? Wunsch warns that we need to face reality head-on: “We’re going to have to relearn how to do ‘power politics,’ to be transactional, to show… that we’re also becoming a political power.”
Despite this worrying diagnosis, he refuses to turn the European Central Bank (ECB) – of which he is one of the 26 members of the Governing Council – into the armed wing of the “power politics” he is calling for. He warns that the monetary institution will not support the financing of governments.
Editor: Pierre Wunsch engages in what Americans used to call ‘letting off steam’ although of a very high order! Enter stage-right Christine Lagarde:
Christine Lagarde, the ECB’s president, has already said that “participating in the financing effort is not the ECB’s raison d’être.” Wunsch pointed out that the ECB has the “exorbitant privilege” of being independent of the political powers. In the name of respect for democracy, to avoid entering the political arena, he believes it is essential to respect to the letter its mandate, defined in the European treaties: to ensure price stability.
Editor: The Wunsch’s final telling comment, refracted through Eric Albert:
Wunsch will not comment and remains open to the idea of pausing the interest rate cut at the next meeting on April 17. “We’ll see what the economic data are like between now and then,” he said. Under these conditions, governments’ budgetary choices are likely to be even more difficult.
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