Lagarde Warns: AI Threatens Europe’s Social Model Without Urgent Action

Artificial intelligence could disrupt Europe’s carefully balanced social model unless countries step up efforts to develop the necessary skills, European Central Bank (ECB) President Christine Lagarde cautioned at an ECB conference in Frankfurt, Bloomberg reports.

Key Takeaways

Lagarde acknowledged AI’s potential to boost productivity but underscored its risks, particularly growing inequality in the labor market.

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The demand for highly skilled professionals who can leverage AI will surge, while those struggling to adapt may be left behind.
She pointed to a 2025 analysis estimating that 23% to 29% of jobs in Europe are highly exposed to automation.
Europe’s strong labor protections could complicate large-scale workforce shifts, making the transition more disruptive if not properly managed.

The Bigger Picture

Lagarde’s remarks reflect broader concerns among central banks as they grapple with AI’s economic impact amid long-term challenges like demographic shifts and climate change.

She also highlighted AI’s role in Europe’s push for technological sovereignty, warning that reliance on foreign innovations may no longer be sustainable.

“We can no longer assume seamless access to cutting-edge technologies developed abroad. This new reality strengthens the case for Europe to take a leadership role in AI,” Lagarde said.

What’s Next?

The ECB is closely monitoring how AI could reshape inflation, monetary policy, and financial stability. The Bank for International Settlements has also urged central banks to better understand AI’s economic implications and leverage it internally.

Lagarde’s conclusion was clear:
“We must remove all barriers that prevent us from leading this revolution. But we must also prepare for its human and environmental impact—starting now.”

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Cyprus President Champions Domestic Defence Industry For National Security And Economic Growth

by THEFUTURE.TEAM

February 18, 2026

Government Commitment To Strengthen National Defence

The President of the Republic, Nikos Christodoulidis, reaffirmed the government’s intention to enhance the country’s deterrence capabilities while expanding the potential of the domestic defense industry. Speaking during a high-level meeting at the Presidential Palace with members of the Cyprus Defence Industry Council, he outlined a strategy that connects national security priorities with long-term economic development.

Performance Assessment And Strategic Objectives

In the presence of Defence Minister Vasilis Palmas, the meeting focused on evaluating the achievements of the council one year following its establishment and delineating the path ahead. The President recalled, “Last year, we decided to institutionalize the Cyprus Defence Industry Council. Today, we review our targets and assess what has been achieved and what remains pending. We discussed the need for a registry of Cypriot companies. It is crucial to amplify the international presence of our enterprises. I remain deeply confident in your capabilities,” emphasizing a performance-driven approach aimed at enhanced operational transparency and market expansion.

Positioning The Industry As A New Economic Pillar

President Christodoulidis expressed his firm belief that the Cypriot defence industry could emerge as a significant economic driver. He described it as a “promising new pillar” for the nation’s economy, bolstered by European initiatives such as the SAFE framework, supplementary equipment procurement plans from third countries, and participation in international trade exhibitions. Such strategies, he noted, open up further opportunities for local businesses to integrate into the global arms market.

International Outreach And Future Economic Impact

The President also pledged active support at an international level, citing his positive response to an invitation to Athens to engage in initiatives aimed at enhanced exposure and collaboration. He was confident that the industry’s contribution could realistically reach a double-digit share of Cyprus’ GDP in the coming years, a target he described as not only ambitious but entirely attainable given current capabilities.

Clear Vision For Measurable Progress

Concluding the meeting, President Christodoulidis reaffirmed his commitment: “I am fully aware of your potential. This is an emerging sector critical to both our economic future and our national security. Today, I expect us to review our concrete achievements, address the areas requiring improvement, and steer this initiative toward even greater success.” This decisive call for accountability and action underscores a broader strategic agenda that intertwines national defence imperatives with forward-looking industrial and economic policies.

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