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The economist Santiago Niño Becerra (Barcelona, 1951) is professor of Economic Structure at the University Ramon Lull since 1994 and is the author of several books such as “The Crash of 2010” (2009), “beyond the crash” (2011) or “The economy. A very personal Story” (2015). This thinker happens to be one of the first people who saw the magnitude of the 2008 crisis. In this interview ensures that the recovery of the economy after the impact of the Covid-19 will have á “the shape of the Nike logo” and, in your opinion, will be “asymmetrical and skewed” . And puts the accent on a harsh reality: the debt. These and other topics discussed in this interview:
What is the difference between the last long economic crisis of 2008 and the current due to the pandemic?
The essential: that then not to be stopped, not stopped absolutely nothing and now has stopped absolutely everything.
Does this crisis is deep and short, like a V, or deeper and more long, such as a U?
I Think the output will be in the form of the Nike logo. That means that it will follow an upward path very smooth, and inclination variable according to the situation of different economies.
do you think that the recovery time will depend on the characteristics and situation of each country? Are there countries more affected than others?
As I was saying, yes. But the recovery of the situation generated by the Covid-19 I understand that it’s not going to be like other recoveries. When the virus began, the world economy was immersed in the third phase of the crisis in 2007. In the Fall of 2018 had already been exhausted the effect of free money injected by the central banks. The forecasts of the international organizations pointed to a slowdown in economic growth widespread in all countries. Countries, however, were in very different situations. In that scenario comes the pandemic. The virus has made accelerator of changes that have occurred in this third phase; changes that point to a new model. In this context, it will produce the recovery will be asymmetrical and skewed.
For the large increase that will have, what will be the debt of States to sustainable and under what conditions?
before the virus of any country could afford. The debt is held because the payments of interest are produced in a timely manner. Then the question is: in the short term, with a debt very top, will all the countries be able to afford to pay the interest that accrues on your debt taking into account that already is causing a decline in tax collection and public spending needs, in principle increasing? And the answer to that question is no. Spain, for instance, is going to go to a few interest payments of at least 40,000 million euros; since we do not think of Latin american and african countries. The debt issue will have to be addressed at the international level.
In the U.S. there is talk of unemployment increases from 4% to 20%, a percentage that reminded him of the depression of ‘29, how long will you be able to recover the previous rate?
Or more. The case of EE.USA is special: its economic success is due to the fact that the rest of the world has accepted all the dollars since the end of world war II the US has agreed to print. In addition, domestic consumption accounts for 75% of its GDP, the level of its corporate debt is excessive, its activity rate is the lowest in 40 years, and their productivity is stagnant. And in these reaches the virus, and in the drawing created by the virus breaks out racial conflict in 2006 had been resolved in an hour. Eye with US; with their economy, their social balance, And with the absence of a robust system of social support. Eye.
These profound crisis and the upcoming us presidential elections, are further fuelling tensions between the U.S. and China with several arguments such as the lack of transparency about the virus and now the measures of China on Hong Kong, how this can become a financial war and economic sanctions and higher tariffs?
I Think that between the US and China, cries and fuss at the margin, it’s not going to happen absolutely nothing because none of the two you are interested in harming. In a technology war and commercial open, the two have a lot to lose. In addition to the two have a lot to be silent on issues at the margins of the economy that could be used by both parties. And both are weak. US by the above noted. China because most of its territory is undeveloped.
This voltage USA/China can complicate the recovery of Europe by the pandemic?
of Course, to Europe this tension will damage because both the US and China are customers and suppliers in Europe. But added to that there is something: there is not one Europe but three of them, which yet disturbed relations.
does This complex situation reinforces the european countries, the idea of that being part of Europe is a lifeguard or nationalisms are still alive?
Is that the classical concept of nationalism is evolving. When a corporation is present in 160 countries, where is the nationalism?. The 30% of british pubs, or are the property of investment funds or multinational drinks. The pubs, one of the leaders of the nationalism of the british.
what are The current indications on possible european measures seem to be sufficient? Do you think that will be confirmed at the time of being approved?
it Is clear that what is finally approved is not what was advertised. But there is something that is obvious: nobody cares that a member country of the EU, the less of the EMU, right-suspension of payments.
When do you start to get the european money to the member countries and with what criteria?
speak April 2021; but he speaks of that date today. Tomorrow may be another. Everything is fluid, everything is changing.
In this crisis, Spain, with its debt, its business structure and its endemic high unemployment rate, what economic impact will it have? What fall expected this year and next year in the employment and in the GDP?
In my opinion Spain will be bailed out in September or October. Not call, of course; nor will the MiB, but with the figures to then show Spain the only pathway that will be that.
does The situation in Latin america will be one more complication for Spanish companies?
Without a doubt. The exposure to Spanish in Latin America is huge in relative terms. A true problem.
How do you see the current political confrontation between Government and opposition at such a sensitive time?
I Insist, as I see it in the autumn Spain will be rescued, and when he joined the political confrontations…
In the Government there is talk of a possible repeal of the current Labour law, what do you think? What is it that you need?
From the perspective of the workers themselves because this legislation creates insecurity. The problem is that it is only through the path of work is as Spain gets competitiveness because their productivity is low because in a few sectors is cost-effective to make investments to improve it.
there is Also talk of potential nationalisation of companies, how this may not be of concern to foreign shareholders and keep investors?
In my opinion Brussels would not allow that in Spain to be carried out nationalisations. Another thing is that in companies that are on the brink of bankruptcy allows for partial interventions and for a limited time; let us remember that the US intervened GM in 2009.
According to your experience and your point of view, what economic measures would be needed to compensate for the total stopping of activity of these months? How to help those who are without a job, regain employment and boosting the economy?
All of that is impossible, a chimera. Spain was already very ill when the virus came, so that the consequences of the virus will influence more negatively in Spain.
What is the space of manoeuvre left to the Government the conditions under which you will be able to use the european money?
I Think almost nil. That is to say, I think that almost all of the funds, or all, and although he did not say so, they are going to be conditioned.