"I think it's going to be difficult. I think the difference is that we have negative rates in Europe," he said, contrasting the ECB's domain to the situation faced earlier by the U.S. Federal Reserve.
"And I think to some extent if you bring negative rates back to zero this would be less dramatic," he added. "I'm not expecting this to happen very soon. Although once you go back to zero I think the important thing is to taper rather than raising rates."
On the subject of European politics, Bini Smaghi said the wave-making nationalistic factions, like the one led by French presidential candidate Marine Le Pen, will ultimately fail to break apart the union.
"I think in the end, France and other countries have too much to lose from Europe falling apart. I think most French people are in favor of the euro, in favor of Europe," he said. "I mean, Europe has to deal with many challenges, immigration, terrorism, the economy, which is growing too slowly."
"I think it's a question also of politicians, mainstream politicians trying to work more on delivering for the people. That's what is really disappointing.
The continent, he said, was "lucky to have" German Chancellor Angela Merkel in her dealings with leaders in Poland, Turkey — and the U.S., where she just visited President Donald Trump.
As for the world's largest economy, and the Trump administration behind its helm, Bini Smaghi said he is seeking clarity.
"I think the U.S. needs to know what they want to do, I mean if they really want to go down a protectionist route, I think this really hurts American business," he said. "The U.S. is 20 percent of the world economy. If they close down, the rest of the world will develop without them. I think they just need to realize that."
China, which is already projected to overtake the U.S. in economic weight in coming years, "seems quite resilient" but it still faces some economic management issues, according to Bini Smaghi.
"They have challenges because they have a large pot of savings that cannot really get out of China because of capital controls. So if it is invested, or in China, there's a risk of, you know, up and downs in the stock markets. If they open the capital accounts and then there is a risk of depreciation of the Renminbi. If they want to counteract that, reserves go down," he said. "So there are some trilemmas, I would call, that they have to solve."
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