Swiftly expanding public debt to support macroeconomic adjustment is entirely warranted to tackle the pandemic, and this process is facilitated by mammoth intervention from the central banks. Meanwhile, low interest rates make this debt sustainable over time. However, this set-up is not viable for the long haul and high public…

Summary The health crisis was a life-size experience. As a result of active economic policies, economies have been resilient. But three ruptures will change the economy of tomorrow. The first is the hierarchy of economic policies. The shock has destabilized the economy and fiscal policy is the best weapon to…

China – US: the battle is just beginning Donald Trump’s threats to world trade are a desperate attempt from the US to maintain the country’s world economic leadership. The most dramatic shift over the past 20 years has taken place in China, as the country has displayed stellar growth and…

Italy – Conte resigns but political imbroglio and uncertainty persist (May 27, 2018) The Italian situation becomes more complex after the resignation of Prime Minister Guiseppe Conte. The Italian president didn’t validate the government Conte has presented to him. In this possible government, Salvini, the leader of the League, had…

Giuseppe Conte: The New Italian Prime Minister – 6 remarks (May 23, 2018) Giuseppe Conte has been appointed Prime Minister by Italian President Sergio Mattarella. The next step is the formation of the government that will reflect the balance of strength between the 5-star Movement and the League. Several remarks …

Italy in 8 points (May 22, 2018) The Italian question remains a concern for Europe, even after the nomination of a prime minister (to be confirmed by the Italian president), who is something of a lowest common denominator between the Five Star Movement and the League. Investors are breathing a…

Emmanuel Macron’s first anniversary as President – part 2 Europe (May 16, 2018) After just one year it is still too soon to make a full assessment of the Macron presidency, so the question we must answer is whether the measures taken by his government over this first year are…

US sanctions to be restrictive for European companies (May 14, 2018) Donald Trump’s announced sanctions on Iran are proving to be quite a headache for European companies that had re-expanded their business in the market since the July 2015 agreement. It is vital here to draw a distinction between a…

Emerging countries : a new element In a recent post I mentioned that the improvement in the greenback had an strong impact on emerging countries. Capital outflows and lower emerging currencies were mentioned as a source of concern. We have to add the interest rate spread that is now wider than it used to be. It was almost stable since the beginning of 2017 with an average spread close to 330 bp. This is no longer the case since mid-April with the change in the greenback profile.