What's going on there in Europe ? It does shake more hands, nor kiss in cities guettées by the invisible and dangerous Coronavirus. In Greece, thousands of migrants, objects of blackmail Turkish, urging the - fragile - walls of the Union to enter. And in the rows of trading on the stock exchange, in the storage warehouses of the enterprises or even in the back-shops, we see a phenomenon that is not ultimately so abstract on the horizon : the economic crisis. True : not a blip, but a real vicious circle with effects on social and political sometimes devastating. "Depression" is actually possible. But european countries, which must manage different fronts, health, humanitarian and economic, can they prevent it?read also : The Paris stock Exchange collapses of 8.39%, its worst session since 2008
To Nicolas Goetzmann, head of the research unit and of the macroeconomic strategy in the Financial of the City, the occurrence of an economic crisis is not yet inevitable, but the markets are now preparing for the worst : "there is no fate, there is nothing to writing. But the current evolution of the stock market is an important signal : the markets expect a lasting impact and express a certain distrust of the political decisions taken up to now. They are insufficient to give a true stability". Same observation for Philippe Waechter, chief economist at Ostrum Asset Management, which opens into a personal article, the example of the evolution of u.s. rates "T-Bonds", down to ten years to thirty years. "This is probably the signal of a further decrease in the reference interest rate of the Fed. The question is whether the u.s. central bank will wait until its next meeting on 17 and 18 march," questioned the financier, for that the situation "reflects the dramatic change in the global economy and the world economic crisis".
An index ? "The manufacturing indexes chinese (official or Markit) fell in February to a level never before achieved, even during the great recession period, from November 2009", observes Philippe Waechter. "This decrease in chinese production has limited the ability of production to other countries. They have reduced their inventories in February but will not be able to continue in march, and longer if the epidemic persists." To the key, a breaking of world trade in many industries... And logical consequences on employment. Nicolas Goetzmann points out the snowball effect that could eventually lead to a decrease of consumption in the United States : "the u.s. markets are the locomotive of the global market, we must begin to take fear also!"."Not the choice a strong reaction"
What can governments in the Eu and the ECB ? The european central Bank meets next Thursday, and must take strong measures, say the two economists. If Philippe Waechter "do [expect] not to a change of rate of the ECB", "what can be changed, it is the level of corporate bonds purchased by the ECB. In this period of adjustment profound, the central bank must limit the risk of bankruptcy," concludes the economist. An assumption shared by the markets : "The market consensus for the ECB is a drop of 10 basis points in the deposit rate and an increase in the program of redemption of debt corporate (CSPP)" said Monday, Reuters Vincent Marioni, director of investments credit Europe at Allianz GI. Nicolas Goetzmann plans as "an opening of the cash, with a stimulus of Quantitative Easing and the repurchase of corporate bonds".read also : The markets are betting on an increase in purchases of private debt by the ECB
But be warned : if the EU can devote all its forces to extinguish the fire in progress, the european financial sector is also dependent of the United States. Philippe Waechter reminds us as well that "if there is a global recession, then the debt world will be important, especially on the business side. In the United States, the level of indebtedness of enterprises, in % of GDP, is now higher than its previous peak in the autumn of 2008". A problem that could become dramatic if "a distrust appears on the debt of the enterprises". And a possible start of a financial crisis similar to that of subprime in 2008.A power struggle inevitable between France and Germany
For the meeting of "coordination" desired by Emmanuel Macron, the issue is the same, but the predictions seem to be more difficult to do. European leaders have held this Tuesday, a video conference to coordinate their actions, particularly in support of the economy. Strong decisions could be taken on the plan and liquidity support for the debt of companies.