Trump's Election Could Negatively Impact European Economy, Says Bank of Greece Governor

The election of Donald Trump as President of the United States could have adverse effects on both the American and European economies if his campaign promises are implemented, warned Yannis Stournaras, Governor of the Bank of Greece (BoG) and European Central Bank (ECB) board member.

Speaking at a conference on public debt hosted by the BoG on Thursday, Stournaras highlighted potential economic repercussions but emphasized the need to await Trump’s official policy statements.

Responding to a question at the event, Stournaras stated that, “from an academic perspective” and based on Trump’s campaign rhetoric, certain conclusions can be drawn. He pointed to Trump’s proposals on migration and tariff increases as key factors that could disrupt economic stability.

“If some of these announcements are implemented, inflation in the U.S. could rise temporarily, and public debt may increase,” Stournaras said, adding that the U.S. Federal Reserve would likely be compelled to respond.

For Europe, Stournaras projected negative consequences, including potential impacts on the euro exchange rate and a slowdown in economic growth. He cautioned that this could influence the ECB's monetary policy, although no immediate changes are planned. “We are not altering our monetary policy, at least until specific policy statements are made by the new president,” he confirmed.

Stournaras also noted that while inflation trends in the Eurozone are improving relative to September forecasts, the broader economy appears to be softening, as indicated by recent Eurostat data. “Monetary policy decisions will depend on the data we review at our next meeting in December,” he said.

The BoG governor reiterated that any definitive conclusions about Trump’s impact on the global economy would depend on the policies his administration enacts after taking office.