Larry Fink, CEO of the asset manager BlackRock, sees weakness in the US dollar as an opportunity for Europe. “The role of the dollar as a reserve currency is being questioned because we in the US are running massive budget deficits and relying on foreign investors to finance them” Fink told the Handelsblatt (Wednesday edition). “This will not go on forever” if the US does not solve its budget problems. The EU can now benefit from the uncertainty caused by US President Donald Trump’s economic policies. “In the short term, Europe will definitely be among the winners, as can be seen from the capital flows from the US to the continent.” However, Europeans urgently need to launch reforms to unleash more economic dynamism. Fink specifically mentioned a capital market union, the completion of the banking union, reducing bureaucracy and speeding up approval processes. Fink expects the future black-red government to provide important economic impulses. The mood in Germany has already improved and the markets’ reaction to the easing of the debt brake and the infrastructure package has been positive. At the same time, Fink warns against dismissing the US. He is optimistic about the long-term perspective of the US economy: “America may not be perfect, but we do things pretty well in the long run.” However, Fink sees great uncertainty caused by the administration in Washington. “Companies are practically forced to create two business plans – one with the tariffs imposed by US President Trump and one without” he said. “That’s why they are putting off investment decisions.” Fink is skeptical of Trump’s special advisor Elon Musk’s radical cuts to reduce the chronic deficit of the US. He believes that this is “a project for ten years, not just for a few months.” One cannot change the culture of institutions and people’s behavior overnight.
Blackrock CEO Sees Europe as Winner in US Trade Dispute
