The problem lies in the third "b". In the scenario of low growth, low inflation, low international trade that afflicts the economy, the most serious danger lies in the deceleration of world trade, in the uncertainties of the trend towards globalization which we believed to be irreversible. It's not a cyclical affliction. It is a reality that is consolidating day by day and with which it is difficult to measure up. An intellectual challenge for economists.
A big puzzle for governments and authorities, called to respond to the problems of the economy as well as the dissatisfaction of the voters. Because, as demonstrated by the Brexit referendum and the US presidential elections, the globalization crisis can prove to be a powerful detonator of uncertainties and changes, including of a political nature. The American case is in many ways emblematic. In the eight years of the Obama administration, the US economy has seen the unemployment rate almost halve and nominal GDP increase by four trillion dollars. To support the recovery from the financial crisis, the mix of monetary policy and fiscal policy has been powerful and balanced.
Monetary expansion more than doubled the stock of Federal Reserve assets. Fiscal "deficit spending" has raised the ratio of public debt to gross domestic product by almost forty points. Quantitative easing and the public deficit helped to support growth and inflation in a context of international trade that was still marching above GDP growth rates. The game worked, at least on the surface.
Between 2008 and 2016, US employment increased by nine million. But between 2008 and 2014, the number of poor people surveyed by the US Census Bureau also increased by nine million. Globalization, with its microeconomic rewriting of the geographies of production and work, has increased inequalities in the distribution of income. It has given a boost to the process of erosion of the middle class.
As long as there was water to hide the rocks, navigation continued. Then, in a context of global economic slowdown, the American electoral round made it clear that macro numbers are not enough to qualify development, nor to win elections. In addition to quantity, growth requires quality. Quality which means, above all, inclusion. The creeping crisis of globalization poses an even greater threat to Europe. The numbers of the economy say it. In the first nine months of this year, German exports grew by just one billion euros, which is equivalent to less than one percent.
In 2015, the pace of expansion was marching past six percentage points. In Italy, the growth of exports fell to less than half a percentage point. For France, cross-border sales even show a decrease compared to last year. Europe's problem is the excessive dependence of our development paradigm on the driving force of exports. A dependence that now takes on traits of true structural imbalance. This is confirmed by the 2017 Alert Mechanism Report published by the European Commission on 16 November. The current account surplus of the euro area has become the largest in the world. It reached 350 billion euros in 2015.
In Germany this gigantic black hole that subtracts investments to accumulate savings will rise this year to nine percentage points of GDP, 50% more than the alert threshold set by the Community mechanisms. Reducing the imbalance means launching a process of diversifying the engines of growth that provides an answer to the frozen trade. The invitation made during the 2017 European Semester to expand the overall fiscal stance of the euro area by half a percentage point of GDP is a step in the right direction. The commitment to grow more and, above all, to grow better will have to go further.
In the absence of fiscal stimuli of American proportions, the challenge will be to take advantage of the ebb of globalization or the ability to attract foreign investments, especially in a perspective of "re-shoring" or repatriation of production. This is especially true for the Italian economy. Grow through reforms that improve our development potential. Reforms that convince investors and markets. Reforms, above all, that look to the future of our children, combining innovation and inclusion.
