Central Banks

No evidence that 'Fortress Europe' is emerging to challenge China or US, ECB's Mersch says

Key Points
  • The ECB's Yves Mersch said Tuesday that Europe is not setting barriers to partnerships and free trade.
  • But France and Germany have announced a strategy to create European “Industrial Champions” that can compete with rivals from China and the United States.
Europe is the world's most open economy, ECB's Mersch says

A key member of the European Central Bank (ECB) has said Europe isn't about to close its doors to foreign partnership and investment.

Yves Mersch, an executive board member of the ECB's monetary decision-making body since 2012, told CNBC's Annette Weisbach on Tuesday that he saw no sign that the continent was interested in erecting barriers to foreign capital.

"I have not seen Fortress Europe. I still think we are still the most open economy that exists around the globe. We have welcomed foreigners into our economy to an extent that is much larger than other jurisdictions," he said.

Powerful European nations such as Germany and France have both faced calls from domestic lawmakers who want Europe to adopt industrial policies that protect its own companies.

Mersch: ECB not against the wall, still has room to maneuver

And in February, both countries agreed to create European "Industrial Champions" that could combine expertise and scale to take on heavyweight rivals from the U.S. and China.

Mersch argued Europe should remain committed to "multilateral global frameworks" but conceded that at the same time, the bloc must also recognize that other jurisdictions would not always play by the same standards and rules.

"If the whole world is playing rugby we cannot continue to play football. That makes it one reason why we have to reflect a little bit on where our bottom lines are for certain (European) values."

Luxembourg-born Mersch said it was clear that Europe had a different approach to protecting some of the rights of citizens than is the case in other jurisdictions.

"(If) it will come as a consequence that our European companies would be the chicken versus the fox that is invited to play by the same rules, it would appear a little naive," he said.