At the prestigious annual ECB Forum on Central Banking held near Sintra, Portugal, Europe's top central bankers expressed their growing concern over the uncertainty surrounding the direction of the world's largest economy following the recent US presidential debate. While the focus of the gathering was expected to be on the French election, the financial experts could not help but turn their attention towards the developments across the Atlantic.

The European establishment, in particular, has been closely monitoring the potential breakdown in France's political landscape since the first round of voting in the general election. However, at the elite gathering of policymakers, the prospect of financial turmoil in France seemed to elicit little worry. Private discussions among the central bankers revealed a lack of concern, with some admitting they were not closely following the situation.

Officials on the ECB's Governing Council dismissed the threat of a far-right majority in France, believing that any radical tendencies would be balanced out by the responsibilities of power. While initial worries centered around the impact of such a majority on France's deficit, the turbulence in French bond markets has since diminished, leading some participants to consider it as a typical occurrence during an election period.

Instead, the assembled experts focused their apprehension on events across the Atlantic, where they felt powerless to influence the outcome. Specifically, concerns were raised regarding the potential consequences of a victory for President Donald Trump. Worries ranged from the US potentially abandoning Ukraine and burdening Europe with the cost of defending the country against Russia, to the impact of Trump's trade and economic policies on global markets.

Goldman Sachs chief economist Jan Hatzius, speaking at a panel discussion, warned about the potential negative effects of Trump's proposed tariffs on European economic growth. Hatzius predicted that Europe could experience a decline of up to 1 percent, significantly more than the anticipated 0.5 percent impact on the US economy. Given the heavy reliance of European exports on the US market, trade policy uncertainty was identified as a key concern.

However, the US election was just one of the many factors discussed that could have substantial implications on the global economy. Attendees of the gathering expressed a broader concern that significant changes were on the horizon and that the current global order may be fading away. The potential trade war between the US and China also weighed heavily on their minds, considering Europe's vulnerability and dependence on Chinese exports.

As the discussions unfolded, the participants acknowledged that Europe's willingness to engage in a trade war at the request of the US was, to some extent, a calculated move to maintain America's support in the proxy war against Russia. However, if the Trump administration were to withdraw from Europe and focus solely on its economic interests, the consequences for Europe could be disastrous.

The Sintra gathering served as a platform for leading central bankers to exchange ideas and address concerns about the global economy. While they expressed some dismissiveness towards the French election turmoil, it became clear that their thoughts were primarily consumed by the uncertainties stemming from the US and the potential impact they could have on Europe's economic landscape.