“A political crisis in Italy would have a very negative impact on growth. Then there is the wait for the German elections and for the moves of the Fed and its next president. And the possible intervention in Syria”. It's a Nouriel Roubini less sparkling than usual, but no less pessimistic as expected, the one presented at the 39th edition of the Ambrosetti – The European House workshop at Villa d'Este in Cernobbio, on Lake Como.
Those listed by the New York University professor are defined by him "known unknowns", i.e. "elements of which we are already aware but whose effects we cannot predict in the coming months". In fact, apart from the Italian crisis averted first by Roubini, everything is already more or less on the table: Merkel's reconfirmation with a possible Grand Coalition, probable military intervention in Syria, tapering by the American central bank, which will stop buying bonds by issuing new currency, and the appointment of a new Fed governor, starting in 2014.
But on which table do these “known unknowns” go to set? On the table of the recovery or the crisis that continues? The reading of the president of Roubini Global Economics is as always tending towards the pessimistic: “Until some time the situation was that the emerging countries were growing and the advanced economies were not. Now things have changed: the Brics are slowing down, while the recovery is beginning to be seen in particular in the USA, even if it is overestimated”.
Yet in the States the GDP will grow in the third quarter, according to estimates, by almost 2% and some macro data have recently been encouraging. “Reading them carefully, no – objects Roubini -: unemployment seems to have dropped because many jobless people are discouraged, they no longer seek and therefore are no longer even counted in the country's workforce. Besides, there are other mediocre data: private consumption is very flat and exports deteriorated in July”.
Then there is, for the USA and consequently for the planet, the Fed's "unknown note": "The tapering will have an influence and then we need to see the next president: in my opinion he will be Larry summers, which would be preferable and in the sign of continuity with Ben Bernanke, certainly more so than the other eligible candidate, Janet Yellen”.
What about the old Eurozone instead? She continues to suffer: “The problem, especially in Italy, is that of political uncertainty, with Berlusconi threatening to pull the plug on the Letta government. It could be a bluff, but if it isn't, Italy risks finding itself without an Executive even before defining the budget (the Stability Law, ed.)”. Prediction of Roubini, regular at the Ambrosetti workshop and connoisseur of Italian issues? "The chance that the government will fall is very low anyway."
However, all the usual problems of the euro area remain: “Low growth, mediocre recovery, unsustainable debt and loss of competitiveness”. And then the increasingly imminent threat of war in Syria, which is being discussed at the same time as the G20 in St. Petersburg: "It could have enormous impacts also due to the increase in oil prices". Another unknown, unfortunately more than known.
