Friday, October 10, 2014
The IMF managing director, Christine Lagarde, yesterday in Washington.
Despite having overcome the debt crisis that came to seriously question the future of the euro just two years ago, the eurozone no longer be at the center of the concerns of the International Monetary Fund, now the slowdown of growth and low inflation. Its managing director, Christine Lagarde yesterday called on the European Central Bank (ECB) to take further expansionary measures to prevent the club from the 27 becomes a new Japan, one of the favorite economists nightmares after spending 20 years with the stagnant economy. The eurozone anxieties by contrast with the analysis made of the Spanish economy. Lagarde dedicated new compliments to government reforms and the “sacrifice of the citizens.”
As she recalled, Spain is the only country in the euro has been revised upwards its growth forecasts, estimated this year by 1.3% of GDP and 1.8% in 2015 “Spain is a country where reforms, hard work and sacrifices made by the people have borne fruit,” said the former French finance minister. “The next thing we want to see is how the unemployment numbers down, ‘he added before a reporter asked him: And rising wages? “That would be great,” he added smilingly.
MESSAGE / It is unclear, however, if it was a message to employers and the Government, engaged since the end of the crisis to cut labor costs gain competitiveness. Several organizations such as the OECD and the International Labour Organization have recently advocated raising wages to stimulate consumption.
Spain had not left Lagarde mouth but for questions from Spanish journalists. What is a good sign. His interest is now focused beyond the Pyrenees, in a France with anemic growth rates in a recession and Italy in Germany without enough steam to pull European Truck. Based on analyst estimates of the IMF, Lagarde said there are between 35% and 40% chance that the continent into the red.
“We are not suggesting that the eurozone is heading Recession, what we say is that there is a serious risk that happening if nothing is done. ” To avoid this, Lagarde called on the ECB’s monetary artillery and fiscal policies that openly promote growth. One of the bailed ideas often these days, passing through public spending on infrastructure to stimulate employment and industry, a Keynesian devoted specifically to Angela Merkel.
“The ECB can not lower rates further interest has to be Germany that bet on an expansionary policy because it has no margin account deficits and to do, “says the professor of EAE Business School, Alexandre Muns. “In addition to infrastructure could encourage higher wages and that the Germans would buy more products from its eurozone partners.”
Earlier this month, the ECB president announced a new round of nut to pump money into the system and try to revive bank lending, one of the main reasons that are weighing on European recovery, the IMF said.
Mario Draghi pledged to increase bank balance by purchase of mortgage securities and asset-backed securities, similar to what was done at the time the Bank of England. For some time also charges banks to leverage their money in the ECB, so that you are not too many rabbits in the hat to further stimulate the economy.
GROWTH / “Without structural reforms, recovery economy will not be possible, “Draghi said yesterday at a conference at the Brookings Institute in Washington, where he has traveled to participate in the biannual meeting of the IMF.
As it has done for some time, the Italian insisted monetary policies alone are unable to pull the growth and urged states to take decisions promptly, without waiting for them to arrive “good times”. “In short, I see no way out of this crisis unless we generate more confidence in the future potential of our economies,” Draghi said
.
About the European cloud also weighs the incipient war sanctions trade with Russia, unleashed following its political and military interference in Ukraine. “The very modest growth in the eurozone in our forecast for next year is attributable partly, but only partly, to the sociopolitical risks we see in this part of the world,” Lagarde said.
According to latest IMF estimates, the euro economy will grow this year by 0.8% and 1.3% in 2015.
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