Bailey: Populism Makes Global Economic Issues More Difficult

Effects of Populism on the Global Economy

The Governor of the Bank of England, Andrew Bailey, stated in a speech earlier this week at the Group of Central Bank Governors and Economists in Bellagio that global economic stability is threatened by populist approaches. Bailey expressed that it has become difficult to emphasize the benefits of international principles during periods of low growth.

The Importance of International Cooperation and Institutions

Bailey emphasized the significant role of multilateral institutions and highlighted the necessity of ensuring strong international cooperation. He stressed that such cooperation should be supported by a rules-based system. He elaborated on the conditions needed for this system to function effectively and the challenges that might be encountered.

Critique of Protectionism and Nationalism

In his speech, although not naming specific individuals, Bailey criticized the manifestations of populist policies. Notably, millennial nationalist approaches that include former U.S. President Donald Trump's tariffs and threats against the Federal Reserve, as well as the rise of Nigel Farage and his Reform UK party, were highlighted. It was stated that populists increase distrust in international cooperation by portraying international institutions as 'distant, indifferent, and working for powerful interests.'

Time to Act

Bailey asserted that defenders of the global system must respond to populist policies not only with words but also with concrete actions.