MILAN – Brexit and refugee crisis: are two new fears to take the show on the table Great countries, so that updates the catalog of their concerns about the fragile economic growth, already undermined by the now old bogeys represented China and financial market volatility. For this, the commitment that comes out from the table of the G20 Shanghai at the end of two days of work focuses on the need to do everything possible to support economic growth. From the side of central bankers, still maintain a loose monetary policy; this will be accompanied by the second crutch of budgetary flexibility to conduct back to balanced growth.
Summarizing the work of the two-day meeting, Economy Minister Pier Carlo Padoan said that they discussed the policies needed to support the question and is open to the idea that “where there is fiscal space this is to be used for measures favorable to the growth, for example for investment expenditure which support both demand and the medium-term growth”. In short, a key on which Italy beats long. In the final text, preceded by rumors filtered from an Italian night, the G20 countries say they use “all policy instruments” as possible, including monetary, fiscal and structural, to strengthen economic confidence and “strengthen the recovery”. The top 20 economies of the world will implement all “policies in both individual and collective measures,” the statement said, in light of the fact that global growth is “uneven and below our ambitions.”
on the side of monetary policy, the Bank of Italy governor Ignazio Visco, has indeed remarked that “the measures of the ECB are not at the” end of the line, fueling expectations for the meeting of 10 March in which Mario Draghi is expected to announce a review of the plan purchase of government bonds. But the number one on Via Nazionale has also taken note of the fact that “the message at the end is to downside risks and growth that continues to be very reasonable. The problem is how to maintain it.” In any case, for Visco there is the risk of bubbles in the markets because “the system is stronger.” Always skeptical fellow German Jens Weidmann, who did not miss the opportunity to point out that “the ECB is not a panacea” for all the ills of the global economy.
After your moonlights of price lists and massive outflows of capital from China and emerging markets, the finance ministers of major economies say they agreed “to consult rapidly” and closely on what is happening in the currency markets, launching early alarms on the volatility that can damage the stability economic. Promises also came on the desire to closely monitor the flow of capital in order to anticipate possible shocks, while returns the call not to use competitive currency devaluations (which sounds particularly strong ear of Chinese hosts, although there ‘is no direct reference to issues related to the slowdown of Beijing and the change of the Asian giant’s economic policy).
As mentioned, these financial aspects will add new factors of tension. A possible Brexit (the exit of Britain from the EU as a result of the referendum) is one of the potential shocks that weigh on the global economy, which is recognized – in accordance with the early drafts from Bloomberg – in the final communiqué leaders: it is a victory of the British government, able to deploy so worldwide in favor of a stay in the Union by London. On this point, Padoan stated that “it is considered, if it were to lead – and I very much hope not – at an exit of Britain from the European Union, a shock which we classify under the heading of major geopolitical shock, so negative.” At Brexit, then, there is a crisis of migrants.
In short, there are plenty of points of concern. Only the opening session, on the other hand, the Organisation for Economic Co-operation and Development warned on stopping the global recovery. The OECD’s message to politicians was strongest when it came to emphasize the concern for the break in the reform process than that seen in the 2013-2014 season: in both advanced economies and emerging modernization of States suffered a backlash, last year. Rome, guaranteed Padoan: “Italy has made much progress on the structural but there is still much to do” but “it is obvious that the agenda of structural reforms must not stop, either in terms of implementation or any factors new to add. the debt is high and must be brought down, because a high debt that continues to grow is particularly fragile, “but the Italian debt” will begin to fall, is high but will decline. “
the interactive OECD to compare economies:
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