French Perspective on Europe

The threat in Europe is not of a big economic recession, but rather of a more prolonged slowdown to which European governments will not respond, says Philippe Martin, chairman of France's Council of Economic Analysis.

by Philippe Martin 12 Nov 2019

The threat in Europe is not of a big economic recession, but rather of a more prolonged slowdown to which European governments will not respond, says Philippe Martin, chairman of France's Council of Economic Analysis. From 2015 to 2016 Martin was economic advisor to President Emmanuel Macron, who at the time was Minister of the Economy, Industry and Digital Affairs. Martin, economics professor at Science Po in Paris, also worked on Macron's 2017 presidential campaign. Europe is often good at the short-term response to a crisis, but then reverses course too quickly, says Martin. The Eurozone now needs a coordinated move towards fiscal expansion which must be led by Germany, which is not sufficiently forward-looking, he says. The ECB is overburdened and politically constrained, which means it will be unable to take more radical options available such as financing fiscal stimulus, while the new president, Christine Lagarde, will have to build consensus. The French economy, meanwhile, is benefitting, albeit accidentally, from the stimulus package at the end of last year.

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