Isolationism could leave the most vulnerable members of society even more exposed than they already are, European Central Bank board member Benoit Coeure said on Wednesday, defending globalization and urging more international cooperation.
Speaking in New York, Coeure said openness, collaboration and tolerance have been key for economic growth while protectionism and unilateral deregulation would only yield short-term benefits at the cost of financial stability.
With the U.S. administration advocating "America First" protectionist policies, Britain leaving the European Union and several top French presidential candidates calling for an isolationist shift, the status quo is facing its biggest challenge in decades.
"As the benefits and legitimacy of international cooperation are being called into question, it’s essential to defend the values that underlie global economic governance," Coeure, a top lieutenant to ECB President Mario Draghi said.
"In Europe, for example, younger generations have grown up in the belief that the free movement of people, goods, services and capital is an unqualified right," Coeure added.
Coeure said that financial deregulation, advocated by the new U.S. administration, could ultimately backfire, with global repercussions.
"While unilateral financial deregulation may yield quick benefits, its potentially harmful implications for financial stability and, ultimately, economic growth are not likely to be felt until later," Coeure said.
"And then, those implications would be felt worldwide. Ultimately, this would leave the most vulnerable members of society very exposed," he added.