Boris Vujčić: Integrated, open and resilient: Europe’s strengths in a fragmenting world

Boris Vujčić, the governor of the Central Bank of Ireland, delivered a speech at a conference in Dublin, highlighting the importance of openness and resilience in Europe's rapidly fragmenting world. He emphasized that the benefits of an open economy can be maintained not by withdrawing from global interaction, but by building resilience to withstand the shocks that come with increased geopolitical instability.

Vujčić pointed to recent events such as Russia's invasion of Ukraine and the Middle East conflict, which have caused significant disruptions in energy markets, tariffs, and technology restrictions, emphasizing that the EU has become more interconnected and dependent on global markets. He noted that while diversification has been a positive step, it has not been enough to prevent large shocks.

To enhance resilience, Vujčić argued for stronger risk-sharing mechanisms and more integrated supply chains across European countries. He also highlighted the importance of reducing internal tariffs within the Single Market, which currently act as an equivalent tariff of 67% for goods and 95% for services, hindering cross-border business operations.