ECB's Villeroy speaking at the Davos conference says the EU should remain calm amid escalating trade tension, though he does stress that tariffs are bad new for activity

• Excepts muted inflation effect in Europe.
• Downside risks in prices are at least as big as the upside.
• In relation to France, says, recent political developments are are a significant step with respect to the deficit but not the whole way. 

Villeroy's remarks at Davos suggest that despite trade tensions, the ECB is advocating for calm, signaling a potential dovish stance. His concerns about tariffs impacting economic activity and the outlook for inflation imply that the ECB may maintain supportive policies in the face of downside price risks, which could influence market expectations for future rate decisions and the euro's performance against other currencies.