What signal will come?

There is a crisis, and how! It is certified by the data published by the European Commission on Monday, 19 January. Indeed, the brusque slowdown of the European economy – in a particularly precarious international context – seems more serious than had been imagined. Even Joaquin Almunia, the EU’s guardian of the financial sector, who rarely appears ruffled or vexed, admitted in grave tones that the recovery would be “slow and gradual” and that perhaps it might be possible to speak of it towards the end of 2009, if not the start of 2010, while the recession “will have significant repercussions on employment and public finances”. The deceleration of the Gross Domestic Product is generalized throughout Europe; public accounts are deep in the red and only inflation is destined to remain firmly in check. No country can be said to be tranquil: not Germany, not France, Spain and not even the United Kingdom. Even the “small” and virtuous economies such as Austria, Holland and Italy are in trouble. The crisis is not even sparing individual industrial sectors: when the train slows down, all the carriages follow the locomotive. And while the metal-working, textile and chemical industries are foundering, the EU and national governments are being forced to intervene, with debatable criteria, to give new oxygen to the car-making sector. A few months ago, in addition, governments throughout Europe took steps to prop up the banking sector and plug the huge holes in their assets caused by the credit crunch… Rightly the EU document on economic forecasts holds up its hands as if to admit it doesn’t know what’s in store. Almunia doesn’t have a magic ball to establish what will happen in three or six months’ time. That’s why the Commission prefers to spell out the message that “a great uncertainty hangs over these forecasts, since we find ourselves faced by the worst crisis that the world economy has gone through since the second world war”. As if to say: for the time being that’s how we see it, but things may get worse. In such a situation, a dual focus of attention will be needed: first, on the results that the measures of support to the national economies, established by the Twenty-Seven at the end of last year, will produce; second, on the dynamics of the world economy. For in the global era interdependence has grown immeasurably and Europe too could exploit – or on the contrary suffer – the developments of the American, Chinese or Indian situation. The crisis, as everyone knows, began in the USA: so all eyes are directed across the Ocean and fixed on the new American President Barack Obama.