European Central Bank President Christine Lagarde warned Wednesday that Europe’s post-war growth model is eroding as expanding global trade, manufacturing supported by cheap energy and a stable rules-based order underpinned by a U.S. security umbrella become less reliable. Speaking at the World Economic Forum’s International Business Council in Geneva, she cited more than 2,500 global trade restrictions last year, U.S. tariffs on European Union goods that were reduced from 20% to 15% under a trade deal, and continuing uncertainty over the agreement and tariffs on products such as steel. Lagarde said geopolitical tensions, security threats and weaker U.S. leadership were putting capital flows and investment at risk. Europe retains major strengths, including the world’s largest network of trade agreements, world-class manufacturing and a 27-member single market serving 450 million consumers, but its technology sector remains far smaller than that of the United States. Europe’s 34 most valuable listed technology companies have a combined market capitalization of about €1.37 trillion, compared with more than $23 trillion for the U.S. Magnificent Seven. Lagarde warned that Europe largely missed the commercial gains of the first digital revolution and cannot repeat that outcome with artificial intelligence. She urged leaders to reduce fragmentation, scale domestic investment and advance EU Inc., a proposed optional EU-wide corporate legal form. The euro area grew 1.5% last year on domestic demand and expanded 0.4% quarter on quarter in the second quarter of 2026, but analysts and industry representatives say political and economic changes are needed to overcome stagnation and competition from China.