June 12, 2019 / 8:38 AM / 4 days ago

Central Europe particularly vulnerable to global trade war: Draghi

FILE PHOTO: Mario Draghi, President of the European Central Bank (ECB), attends a news conference in Vilnius, Lithuania June 6, 2019. REUTERS/Ints Kalnins

FRANKFURT (Reuters) - Central European economies may be more vulnerable to a global trade war given their high reliance on foreign trade and particular focus on single industries, such as car manufacturing, European Central Bank President Mario Draghi said on Wednesday.

“The central and eastern European business model has become vulnerable to shocks to international trade and financial conditions,” Draghi told an ECB conference. “The effect of tariffs could be amplified, as a large share of goods cross borders multiple times during the production process.”

“The main long-term challenge is moving towards a more balanced growth and financing model, which is more reliant on domestic innovation and on higher investment spending than it has been so far,” Draghi added.

Reporting by Balazs Koranyi; Editing by Francesco Canepa

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