Here we go again. Once the effect of the ECB loans has ended, the crisis returns to reappear on the horizon of the price lists. And cast ever heavier shadows on the real economy. Is it like this or will the "freeze" this year be less severe than in 2010/11 in full Greek syndrome? “Unfortunately, the pattern is the same. When the morphine effect disappears, the system's vulnerability re-emerges” replies Mario Noera, professor of financial market economics at Bocconi University.
This time, however, Greece has nothing to do with it.
"The trigger of the crisis can be linked to doubts about the recovery of the US economy, which remains fragile. Or the braking of China”.
Causes extraneous to the European crisis.
"This only confirms that the markets do not attribute to Europe the ability to emerge from the crisis on its own. Europe still suffers from the events of others, hanging by a thread of hope linked to exports. The situation hasn't changed, but we don't take note of it: I don't know if by will or political foolishness".
Yet there have been no lack of political summits and agreements in recent months. Everything useless?
"Aside from the generosity of the ECB's intervention, essentially only one initiative was seen, moreover pro-cyclical with respect to the recessionary climate: the Fiscal Compact (the pact that binds EU governments to greater rigor in accounts and in the financial statements, ed), which is a concentration of fiscal constraints, moreover destined to last over time. A very disturbing picture risks emerging, in the absence of corrections: it is estimated that the EU countries will be able to bear the roadmap envisaged by the agreements in the event of growth between 1.5 and XNUMX percent. Otherwise, new corrective measures will be needed first in Portugal, then in Spain. Finally in Italy”.
In this framework, there is the risk of nullifying the effect of the generosity of the ECB. Or not?
"Actually I don't think it's appropriate to talk about "generosity". The European Central Bank has not injected new liquidity. It simply filled the liquidity hole that was created with the interbank market freeze. Before the crisis, the banks of strong countries lent capital to weak countries. Then the flow stopped and the ECB had to play a substitute role. Mario Draghi's intervention acted as a shock absorber for the damage, not as a propeller for the recovery ".
In short, the European system has renationalised itself. Is that it?
"It is one of the phenomena of the current crisis which has at least two consequences. First, the race for capital in strong countries, with the result that German rates are reaching minimum yields, thus contributing to widening the spread. Second, the redistribution of liquidity is not working, which has forced the ECB to take the field to replace the capital market of the euro area. The rule these days is that no one buys other people's securities anymore: this applies to the Germans, the French but also to our system or the Spanish one”.
In this picture the international star of Mario Monti, who had aroused great hopes at the beginning, seems to fade.
"The first moves had been very encouraging. Towards government action, see pension reform, it had been really heavy. But on the other side of the balance was the recovery of a great international credibility culminating in the agreement signed by 26 countries which seemed to be the start of a new phase of the EU's political action. Unfortunately, for some time now we have returned to the previous picture: the Fiscal Compact is a creature wanted by the Germans. Just as there has not been a significant change on the resources front for the State-saving Fund. And the international stasis has been reflected in domestic political moves”.
Or?
"In other words, the recipe of internal deflation as suggested by the Bundesbank, which provides for wage cuts, has once again prevailed. Hence the stiffening that marked the phase that preceded the labor reform. Yet it is enough to look at Spain to understand that this recipe fails to convince the markets. Madrid has adopted a much stricter labor reform than ours and has enacted equally painful budget cuts. But it has not convinced financial operators who today look at the lack of growth more than at other indicators.
In short, the Eurodebate is at the starting point. And nothing moves before the French elections.
"Then will come the German elections and, let us not forget, the vote in Italy. The French elections can be a risk but also an opportunity. It is possible, in the event of a socialist victory, that France will ask to re-discuss the Fiscal Compact. In my opinion this could be a great opportunity for Mario Monti who certainly doesn't lead a left-wing executive but can take advantage of the reopening of the debate to propose to Europe a line that puts the development game back in the foreground”.
