Cheføkonomen i UniCredit, Erik F. Nielsen, skriver i sin søndagsklumme, at den globale vækst bliver lavere, når pandemien er overstået, og at Kina i denne tid trækker vækststen nedad. Men han skriver også, at centralbankernes pengepolitik ikke længere kan stimulere økonomien. Derfor må staternes finanspolitik klare jobbet. Men kan de det? Tør Europas regeringer slække finanspolitikken og gældsregler for at få flere investeringer? Vil de holde fast i Stabilitetspagten, eller vil de slække den? Den kommende tyske regering vil måske slække på den traditionelle strammerkurs, og der er en voksende debat i EU om at slække på Stabilitetspagten for at få flere investeringer. Nielsen citerer fra et interview, Der Spiegel har med chefen for EU’s redningsfond, Klaus Regling. Der Spiegel spørger, om en svækkelse af Stabilitetspagten ikke slækker på troværdigheden, hvis gældsreglerne slækkes, hvortil Regling svarer, at “man også kan svække sin troværdighed, hvis man holder fast i en fornuftsstridig regel.” Det er en af de vigtigste udtalelser om europæisk finanspoitik, mener Erik Nielsen. Der er  åbenbart bevægelse i den europæiske finans- og gældspolitik. 

Uddrag fra UniCredit:

Sunday Wrap

This past week, on the occasion of its Annual Meetings, the IMF published its new global forecasts in the World Economic Outlook (the WEO) and its thoughts on fiscal policies in the Fiscal Monitor, titled “Strengthening the Credibility of Public Finances”.

What a strange title of this key fiscal publication now 18 months after fiscal policy came to the rescue of the world
(that’s what I call credibility) and now needs to take over from monetary policy! Let me explain:

The global growth forecast was revised down only marginally from the July report (to a still robust 5.9% this year, followed by 4.9% next year), but the aggregate disguises a greater moderation in growth among the industrialized countries (mostly due to supply constraints) as well as in several low-income countries (mostly COVID related), while the forecasts for several commodity producers were revised up.

I share the concern that the global recovery may peter out once we get through the pre-pandemic GDP levels, and hence well before we get back to the extension of the pre-pandemic trend line.

We are likely to get a significant drag from China as their credit impulse is now turning south big-time (there is a strong correlation between the Chinese credit impulse and global manufacturing PMIs 12 months later) and their coal and electricity prices are skyrocketing. Meanwhile, the policy mix in the OECD area is unlikely to help get us to where we ought to be in terms of GDP levels.

In a nutshell, monetary stimulus is about to be reduced almost everywhere: In the US and UK for quite good reasons because of the inflation outlook (in the US helped by the fiscal stimulus, in the UK sadly because of additional post-Brexit supply issues), while in the eurozone it’ll be driven mostly by the urge to end PEPP.

But across all the different reasons for a reduction in monetary stimulus I have heard this past week lies a common theme of discomfort with the level of QE and/or balance sheets.

But will fiscal policy fill the void?
The FT’s Martin Wolf put it succinctly in his piece on Wednesday: “As economies exit the pandemic, [policy] assistance can be less generous and better targeted. This means that it should come from the fiscal authorities. High-income countries confront no fiscal crisis. The premature austerity that followed the global financial crisis must not be repeated…. Meanwhile, a number of central banks need to start withdrawing today’s ultra-loose monetary policy. Such a rebalancing of fiscal and monetary policies would help both the people and the economy… In the US and UK, the time for this is now.”

Note that Martin Wolf (rightly) did not include the eurozone here and yet, the eurozone is more at risk than most other places of not letting fiscal policy do its job – because of a misguided understanding of what “fiscal credibility” is.
I’ll elaborate on this:

■ On Friday, Germany took a big step closer to forming an unprecedented 3-party coalition, and – as expected – it
looks like they’ll pencil over the apparently unresolvable conflict between an obsession with the debt brake and a
clear public demand for more investment. This will complicate Germany’s fiscal policy and muddle the much
needed update of the EU’s fiscal rules.

■ The European leadership vacuum on fiscal policy. The ESM’s Klaus Regling has stepped up his attempt to help get
European policymakers to appreciate the obvious need for better fiscal rules – without saying what exactly he
thinks they should be.

In an interview with Der Spiegel, a sceptical interviewer asked Regling: “But would not the Stability Pact lose all credibility if the debt rules were eased further?”, and Regling makes the single most important point in this entire debate, by noting that “you can also lose credibility by sticking to rules that have become economically nonsensical.” The relatively short interview is worth reading in its entirety.