Finans

Økonomer: Europas vej ud af krisen: Vækst og ikke besparelser

Hugo Gaarden

onsdag 01. april 2020 kl. 16:00

To europæiske økonomer kommer med et af de mest konkrete forslag til at få gang i Europas økonomi efter coronakrisen. De foreslår en vækstorienteret strategi – efter de finansielle nødhjælpspakker, der kun afbøder nedturen. EU-landene må ikke gentage sparekursen efter finanskrisen, men de må stimulere virksomhederne med f.eks. låneeftergivelser, skattelettelser, offentlige investeringer og forbruger-checks til borgerne.

Artikel fra World Economic Forum og Centre for European Reform, skrevet af Christian Odendahl, chief economist, og John Springford, deputy director at the Centre for European Reform.

European policy-makers must offset the huge costs of containing the virus, while keeping debt sustainable in all eurozone member-states. But they also need a plan to stimulate a V-shaped recovery.

Governments are deliberately curtailing economic activity for public health reasons. This is the first stage of the crisis, and in a CER analysis on March 10th, we explained how policy-makers must offset falling income for businesses and households.

Most European governments have started to enact policies similar to our proposals: emergency lending to help firms with cashflow and banks with funding, short-time working policies and pay support to prevent unemployment.

These policies will require enormous government deficits this year, and borrowing costs have risen in Italy, Spain, Portugal and Greece. But policy-makers must also plan for stage two of the crisis. They must prevent a weak recovery, by stimulating the economy as soon as the virus is sufficiently contained to allow people to return to work. What can governments do now to help the recovery?

And what must the eurozone do now to ensure that all governments have the capacity to enact both stages of this plan?

Markets are unstable because investors do not know how long containment policies will last. And there is a risk that, once the crisis begins to ease, fiscal and monetary action is withdrawn too quickly, as happened after the financial crisis.

Now, as then, governments are expanding deficits in order to keep businesses and households afloat. But from 2010, most governments embarked on austerity – and only few did so because of pressure from bond markets. Then the European Central Bank (ECB) raised interest rates in 2011.

Both monetary and fiscal policy are needed. The ECB should announce that it will tolerate a period of above-target inflation to compensate for the current undershoot: eurozone inflation has been hovering around 1 per cent for years.

Last year, the ECB made clear that it wanted inflation to make a sustained recovery to 2 per cent before raising interest rates and stopping its bond purchase programme. It should now go further, and permit inflation to overshoot for two years to allow a boom to play out, without raising interest rates.

Fiscal policy should act on four fronts. Governments have provided loans to businesses to help them cope with falling revenues. But loans will raise debt burdens, which can curb investment. Governments should announce that part of these loans will be forgiven if the economy as a whole fails to make a strong recovery after the epidemic is contained.

Companies should not be responsible for governments’ failure to overcome the virus and create the conditions for recovery. Governments should also legislate for generous tax relief for investment after the crisis through temporary tax credits.

The second front should be aid to the most affected services sectors. Here, the recovery will be weaker than in manufacturing: a cancelled restaurant visit, concert or holiday trip will rarely be rescheduled. To help raise demand, governments should announce today that these sectors will pay a lower VAT rate for a year, to boost consumption and activity (if prices are lowered in response) or repair balance sheets (if firms choose to use the tax cut to raise profits, and not lower prices). In 2009, the UK temporarily cut VAT, and the evidence suggests that 75 per cent of the cut was passed on to consumers.

The third front is consumption. Boosting consumer spending would help the most badly affected services sectors too. A one-time payment could be made as the pandemic eases, along the lines of the US’s 2008 ‘economic stimulus payments’ of around $300-600 per person.

Research shows that consumers spent between 50 and 90 per cent of that money within three months of its disbursement. In countries like Germany that have a high tax burden on low incomes, permanent tax reductions on low incomes would be preferable, making work more attractive and expanding economic activity.

The final front is public investment. Many countries will have much higher public debt after the containment phase, and governments will be tempted to cut investment. Companies may anticipate that, and curb capacity now. If governments commit to a long-term programme of higher public investment after this crisis, firms dependent on public sector contracts will know that they can maintain – or even increase – capacity.

The eurozone’s fiscal hawks will argue, wrongly, that stimulus measures of this type make debt unsustainable. The ECB and the European Stability Mechanism (ESM), the eurozone’s bailout fund, have all the tools necessary to keep government borrowing costs down. On March 18th, the ECB announced €750 billion of new asset purchases, and, in a departure from usual practice, said they would be willing to buy more Italian assets, rather than buying from all countries in proportion to their ECB capital. This powerful commitment has eased tensions in markets.

European fiscal policy-makers should complement the ECB with collective action of their own. The ESM should help by providing bailout funds, with conditions to ensure spending is well-targeted on liquidity support to companies and wage support for workers. Ideally, this would be agreed for all eurozone member-states at once, rather than singling out Italy. A memorandum of understanding could make clear that the credit lines will only last for one year before having to be renewed. Policy-makers should also make clear that ESM funding will be increased if need be, through more joint borrowing by the member-states.

Of course, even well-designed stimulus programmes would raise public debt. But since they also increase economic activity, the crucial debt-to-GDP ratio may not increase much, or even fall. Monetary policy is currently weak because interest rates are near (or below) zero. In these conditions, deficit spending by governments tends to raise GDP faster than it raises public debt. This is particularly true if a pre-announced stimulus has positive economic effects during the epidemic, in reassuring businesses that revenues will be higher in the future, allowing them to pay for the loans taken on during the containment phase.

If Europe does not stand together, the consequences of the virus could be severe. Countries that fail to use fiscal policy to offset the deep recession will suffer permanent (and unnecessary) economic damage. In extremis, a renewed financial crisis in the eurozone would need to be contained, most likely through the ECB printing money and financing government deficits directly. Such a move is not as radical as it appears, since the economic hit from coronavirus will be severe but temporary, but it would almost certainly face fierce opposition in northern member-states. This virus is a very difficult test for the EU, but there is a broad expert consensus about the economics of the pandemic. And there will be no excuse if governments fail to act.

Christian Odendahl is chief economist and John Springford is deputy director at the Centre for European Reform.

Del på facebook
Del på twitter
Del på linkedin
Del på email
Del på print

[postviewcount]

Formue

ØU Trader: Porteføljen fortsætter opad, slutter ugen i + 36% i 2020

Økonomisk Ugebrevs Portefølje ligger for 2020 aktuelt med et afkast på 36,0% – mod Copenhagen Benchmark på 30,6%. Altså 5,4 procentpoint bedre end benchmark. Den sidste del af porteføljens…
Samfundsansvar
Nordisk pensionssektor en af de mest transparente i EU
Samfundsansvar
Usikkerhed om EU Green Deal gift for Rockwools potentiale
Samfundsansvar
Intelligent skideballe til erhvervslivets CSR-indsatser
Samfundsansvar
Klimaplan skaber tvivl om aftale med Aalborg Portland
Samfundsansvar
EU Ombudskvinde: Kommissionen fejlede ved at hyre BlackRock som ESG-rådgiver
Finans
Genetablerede KPMG kan snart være tilbage i dansk Big Four
Finans
Store revisionshuse får flere kunder, trods øget fravalg af revision
Finans
Ekspertforslag: Sådan undgås skæve værdier på pensionssektorens alternativer
Finans
Hvornår løber Waturus pengekasse tom?
Samfundsansvar
Regeringens udspil til Grøn Skatterefom
Finans
Parken høster stort skjult sommerhus-guldæg næste år
Samfundsansvar
Podcast fra P4: ØU-redaktør om ny database for kontroversielle investeringer
Formue
Langers Skarpe Aktietips: Nu skal man tænke både kortsigtet og langsigtet
Samfundsansvar
Nasdaq køber firma til afsløring af finansiel kriminalitet og hvidvask

Seneste nyt

Finans
Slemme røde tal i Vækstfondens ventureportefølje
Samfundsansvar
EU-strategi for vedvarende offshoreenergi
Ledelse
Andelen af kvindelige ledere vokser, men ikke i topledelsen
Samfundsansvar
Kun et dansk selskab på nyt Dow Jones Sustainability Index
Samfundsansvar

ATP skærper investeringsstrategi overfor kulindustri

ATP er én af seks danske investorer på den tyske NGO Urgewalds nyopdaterede Coal Exit List, som kortlægger store investorers exitpolitik fra kulinvesteringer. ATP strammede i foråret sin eksklusionspolitik…

Aktuel artikelserie

Trænger First North vækstbørsen til en opstramning?

Chefredaktør Morten W. Langer har i en artikelserie påpeget en stribe huller i NasdaqOMX’s arbejde med at skabe en dansk vækstbørs, investorerne kan have tillid til. Selskaber som Conferize og NPinvestor har fra start været baseret på ekstremt svage forretningsmodeller og overvurderede værdiansættelser. Aktuelt viser sagen om Waturu, at institutionen med Certified Advisors ikke fungerer godt nok, når det gælder sikring af fyldestgørende information til investorerne. Baggrunden for ØU’s fokus på First North er, at en velfungerende dansk vækstbørs er samfundsmæssig vigtig som formidler af risikovillig kapital til små vækstvirksomheder.

Andre artikelserier

Dilemmaer i det aktive ejerskab
Finansiering af den grønne omstilling
Sustainable Finance: Nye spilleregler for den finansielle sektor
Nye krav til bestyrelsen i kølvandet på Coronakrisen
Hvilke strategier sikrer den bedre performance under coronakrisen?
Den danske banksektors lange vej mod konsolidering?
Ledelse
Kapitalismen skal tæmmes, ikke slås ihjel
Formue
Børshandel startet i Huscompagniet: Emissionsbanker holder hånden under aktien
Samfundsansvar
Analyse: ESG ratings forvirrer investorer om reel bæredygtighed
Formue
Aktieanalyse: Spirende optimisme hos Novo Nordisk
Finans
Qudos: Aarhusianske finansfolk stod bag kæmpe forsikringskonkurs med milliardtab
Samfundsansvar
Investeringsdirektør i PFA: Med Joe Bidens valgsejr i USA vil den grønne transformation tage fart
Finans
HusCompagniet klemmer citronen med slap vækststrategi
Finans
Optræk til stærkt comeback til SAS, efter mere corona
Formue
S&P Future: Så kom startsignalet til det næste aktierally
Formue
MSCI: Europæiske aktier har givet minus 5% i afkast i år, Danmark +30%
Samfundsansvar
ATP kræver mere specifikke skattepolitikker af virksomheder
Samfundsansvar
Investorer opfordrer europæiske virksomheder til at vise ‘manglende’ klimaomkostninger
Samfundsansvar
Læger uden Grænser: Aftaler om vacciner skal lægges frem for offentligheden
Ledelse
En verden til forskel: 20 år med god selskabsledelse

Seneste nyt

Formue
S&P Future står foran megastærkt aktierally – eller en flad udvikling med rotation
Formue
Finanshus går mod uberbullish udsigt: “Reopning Rotation Story is bearish”

Mest læste

Få dit daglige nyhedsoverblik i din indbakke

Seneste rapporter fra eksterne rådgivere

EU-Domstolen: TV2 skal betale ulovligheds­renter for statsstøtte
Har du styr på din prismarkedsføring til Black Friday?
Aftale på plads: Lagerbeskatning af løbende avancer for ejendomsselskaber indføres
Dybdegående og original 
journalistik siden 1994

Økonomisk Ugebrev har i mere end 25 år leveret indsigtsfuld og dagsordensættende journalistik og analyser til læserne og den brede offentlighed. 

Vi tager ansvar for vores indhold og er tilmeldt:

KONTAKT

Telefonisk henvendelse: 70 23 40 10
Telefonerne er åbne alle hverdage fra: 10-15

Skriv til os på: [email protected]
Vi bestræber os på at besvare henvendelser indenfor 24 timer.

Økonomisk Ugebrev A/S
CVR-nr.: 31760623
Sundkaj 125, 3. sal
Nordhavn 2150

Log ind

Har du ikke allerede en bruger? Opret dig her.

Analyse af og prognoser for Fixed Income (statsrenter)

Direkte adgang til opdaterede analyser fra toneangivende finanshuse:

Goldman Sachs

Fidelity

Danske Bank

Morgan Stanley

ABN Amro

Jyske Bank

UBS

SEB

Natixis

Handelsbanken

Merril Lynch 

Analyse og prognoser for kort rente, samt for centralbankernes politikker

Links:

RBC

Capital Economics

Yardeni – Central Bank Balance Sheet 

Investing.com: FED Watch Monitor Tool

Nordea

Scotiabank

 

Log ind

[iteras-paywall-login paywallid="qwerty123"]
X