ECB's Schnabel says 'dramatic surge' in uncertainty may get worse

The euro zone economy's long standing structural headwinds have been exacerbated by a surge in uncertainty which may get even worse in the wake of U.S. trade tariffs, European Central Bank policy maker Isabel Schnabel said on Saturday.

Speaking at an economic forum in northern Italy, Schnabel said the ECB would look closely in the coming weeks at the implications for euro zone growth and inflation of the tariffs announced by U.S. President Donald Trump on Wednesday.

For now, she said recent events had caused "a dramatic surge in uncertainty" which may be only the beginning.


"Some people had the view that Liberation Day (the name Trump gave to his tariff announcements on Wednesday) could be the day of peak uncertainty, but I'm not entirely sure that is the case," she said.

Schnabel, who sits on the ECB's Frankfurt-based executive board, directly rejected an assertion by Trump that the European Union had been formed to "screw" the United States.

"Of course the EU was not born to screw the United States, but it was born to make Europe thrive," she said.