Japanese Syndrome for Europe Government bonds, overtaking Greece


What does it mean to be the weak link in a euro area taken by the Japanese syndrome, the question that Italy must ask itself to face the coming years with open eyes. That Europe is turning into a sort of big Japan – low growth, slow investments, savings to the stars – no longer just Mario Draghi to support it. In September, among thousands of controversies, the now ex-president imposed the last expansive plan on the European Central Bank precisely because he saw this sort of creeping glaciation coming that the Japanese knew after their debt crisis of thirty years ago. That the euro area is in danger of advancing on the same road, the European Commission has shown since yesterday. From his forecasts a dominant message emerges: after the slowdown of Germany and Europe in this year of trade wars between the United States and China, the recovery is not seen even in 2021. Not for the euro area, even less for the 'Italy.

The European malaise that emerges in Brussels no longer seems cyclical, fueled by the ups and downs of the economy; thin, not exploding in a recession, but permanent. Labor productivity – the value produced by each employee in a year – this year falls in Italy more than in any other country, but is also reduced in Germany, Holland, Spain. the sign that more and more people are working on old technologies, given the insufficiency of investments for almost a decade. Net of the devaluation due to usury – it is estimated to the Commission – these are still for nine years on average of the euro area. This continent seems to be more and more the land of the industry of the last century: more diesel cars and machine tools, less artificial intelligence or last generation digital networks, less spending on research and development – in proportion to income – than in China, United States , Japan.

Thus in Germany the growth for 2020 revised downwards by one third and should not exceed one percent in the next two years; European growth is also being cut and remains nailed to 1.2% in the next two years; consumption and investment slow down and only the savings of insecure frugal families of the future (in Germany at 20% of income, in Italy at 10%). plausible that the Commission forces a little the tone just to push Berlin to react by investing. But Italy, however, is more ill than others and is at the same time the object of greater concern and deeper annoyance. Not only is Europe's lowest growth stably, in fact zero for this year and next; not only the highest public debt after Greece, in continuous increase, with Brussels that foresees a level of 137.4% of the gross product in 2021 (much above the 133.4% announced by the government). Even yesterday evening for the first time since 2008 the yields of Italian debt at ten years have become higher than the Greek ones, confirming the mistrust surrounding the country. But precisely the political problem. in what, seen from Brussels, the absence of leadership of a large, fragile and unpredictable country. Perceived as a loose cannon that inhibits any possible German concession to rebalance the euro area. A European negotiator noted last night: "With its conditions, Italy prevents discussions on everything: from banking union to more modern and intelligent budget rules". The country certainly stabilized on the markets after the fearful fluctuations of 2018. But the question of anyone in Brussels remains the

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