The ECB Podcast Ask the ECB Forum: defence, tariffs and AI – insights from top experts
Jul 9, 2025
This discussion dives into the impact of increased defense spending on green energy and digital infrastructure investments. Experts explore the implications of US tariff threats on the ECB and how they could shape Europe’s economic landscape. The conversation also addresses whether the ECB favors larger economies over smaller ones and the support for nations like Slovenia. Finally, the podcast investigates the dual nature of artificial intelligence, weighing its potential benefits against risks to the financial sector.
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Episode notes
Defense Spending's Broad Impact
- Defense spending in Europe goes beyond weapons to energy security, cybersecurity, and resilient infrastructure.
- Policymakers face trade-offs in allocation that will impact both defense and competitiveness for decades.
Defense Spending Economic Effects
- Increased defense and infrastructure investment might stimulate growth but could raise inflation in the medium term.
- Impact on government finances remains a key focus for the ECB, especially during fiscal pressures.
Tariffs Increase Economic Uncertainty
- US tariffs present a limited direct shock but create broader volatility and uncertainty globally.
- ECB's new policy strategy aims to handle unpredictable inflation deviations from such shocks.