In light of the ongoing tariff dispute, uncertainty in the financial markets and within firms is high, Bundesbank president Joachim Nagel has said in a joint press statement with Federal Finance Minister Lars Klingbeil. The pair were speaking whilst attending the meeting of G20 finance ministers and central bank governors in KwaZulu-Natal. Mr Nagel stressed the vital importance of reaching an agreement in the conflict over tariffs, but he insisted that the EU should not acquiesce to the United States at all costs. He also called on the United States not to treat the situation like a game: “At the end of the day, when there’s the potential for economic policies that could cause major damage on a global scale, it’s everybody’s prosperity that’s at stake.”

He noted that firms were already experiencing enormous uncertainty, and this was weighing on them like a kind of silent tax.

Speaking on the fringes of the G20 meeting, Mr Nagel commented that, according to the Bundesbank’s assessment, the tariffs announced by US President Donald Trump could see the German economy sliding back into a slight recession in 2025.

Nagel: Pick up the pace on crypto-asset regulation

The Bundesbank’s President raised the issue of financial products such as stablecoins, pointing out that they are associated with risks – in the event of high market volatility, say. In the statement to the press, he stressed: “And this is an area where we need to speed things up in terms of regulation, take an even firmer hold and see what we can do to prevent worse things from happening.” He said that particular attention should be paid to the non-bank sector. 

About the G20 and the Bundesbank’s work

The G20 is the premier informal forum for international economic cooperation. It plays a key role in shaping and strengthening the global architecture on all major international economic issues. The G20 comprises the 19 most important advanced and emerging market economies (EMEs) as well as the European Union and thus represents about two-thirds of the world's population.

As Germany’s central bank, the Bundesbank is a member of the G20 in its own right, alongside the Federal Government. The President of the Bundesbank and an alternate attend the regular meetings of the finance ministers and central bank governors. These meetings serve as preparatory work for the monetary and financial issues covered at the annual G20 summit. 

At the meeting of finance ministers and central bank governors, the G20 looks at how the international community can prevent and manage economic and financial crises. The group also discusses how to achieve robust, sustainable and inclusive economic growth and how to enhance the international financial architecture.