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Premières leçons de crises au XXIe siècle


Dinsdag 2/6/2020
Giuseppe Pagano

The consequences of the present corona-crisis are disruptive and unprecedented since1929.  GDP is expected to go down by approximatively 7 % in Belgium and 7,5 % in the Euro Area, with alarming effects on unemployment and public debt.


The economic authorities have reacted with great vigour. The ECB has ensured the market liquidity, and the governments have increased their deficits. However, one should wonder about the limits of such policies. The monetary policy of the ECB could be questioned if inflation were to exceed the 2 % threshold. Moreover interference by national agencies such as the German Constitutional Court is to be feared. Yet, the limit of public indebtedness is to be found in the availability of lenders at a reasonable rate, which is narrowly linked to the rate and liquidity policy of the ECB. Moreover the cost of the debt has now proved to be more important than the debt ratio as such.


Finally, one can try to identify the “winners” and the “losers” of the crisis. Among the former are the governments, the collective health systems and research. Among the latter are uncontrolled international exchanges and unlimited delocalizations. De-growth, in its most radical sense, is also to be ranked along the losers. The fate of taxpayers is rather unclear; however it can be hoped that the crisis  would encourage fiscal authorities to privilege the fight against big tax evasion, the taxation of financial transactions and the introduction of a general carbon tax. At last, the reaction of the European Union seems to to get closer to what would be most useful. It is especially the case with the project of common loans set forth by Germany and France. Moreover the new types of taxation mentioned hereabove could be an ideal opportunity for Europe to show how useful she can be.