analysis! Europe's new female leader Can the European economy recover? Aug 9 16:00

There is growing concern about the global economic slowdown due to trade friction between the United States and China. In response to this, the rate of interest rate cuts is expected in Europe, following the United States and Asia.

Under these circumstances, two women were chosen as future leaders of Europe. How will the two people rebuild their economic sphere with a population of 500 million? I have an expert analyze it.
(International Department reporter Taichi Soga)

These two at the notice post

The two posts that received the most attention at the EU = European Union meeting in July.

One of them is the successor of Dragi, President of ECB = European Central Bank. Mr. Lagarde, a French IMF Executive Director, was selected.

And as the chairman of the European Commission, which oversees European economic policies, Mr. Von de Alien, who was the defense minister in Germany, will take over.

Europe reaches its “monetary policy limit”

Mr. Lagarde served as French finance minister during the Euro crisis and was selected as the IMF's Managing Director in 2011. The ECB governor, who oversees monetary policy across Europe, has been a central bank governor in all three countries in his past three years, but Mr. Lagarde has no experience as a central bank governor.

It is said that monetary policy is reaching its limits in Europe. The ECB has gradually lowered its policy interest rate since 2011 to deal with credit uncertainty in the region, which originated in Greece, and has been implementing a negative interest rate policy since June 2014.

In addition to these interest rate policies, we have also implemented a so-called “quantitative easing policy” in which assets such as government bonds are purchased to increase funds in the market, and large-scale asset purchases have just ended in December last year.

Despite these policies, however, last year's GDP growth rate in the Eurozone was low at 1.9%, and the slowdown in the economy became clear. This suggests that it will be implemented in September at the earliest.

In addition, at the end of October, the new EU Prime Minister Johnson is ready to leave the UK EU due to the deadline for withdrawal from the EU, which is a concern for the global economy as well as the European economy. .

Baton touch in the headwind

In such a difficult situation, Mr. Tomohide Kiuchi, an executive economist at Nomura Research Institute, who served as a deliberation member of the Bank of Japan for the appointment of Mr. Lagarde, said “ I think you will be forced to do so. ”

Mr. Kiuchi said that Dr. Draghi suggested that in addition to interest rate cuts, the resumption of asset purchases would be resumed, a German rebound is expected, “If the ECB bought a risky asset, If they do, Germany is worried that their ECB will have a large share of the ECB, and that their burden will increase, while Southern Europe and France are currently in poor economic conditions I ’m hoping for a natural mitigation and there ’s disagreement. ”

In addition, if the negative interest rate policy is deepened like the BOJ, it will put pressure on the profits of financial institutions, so measures to offset the impact will be necessary.

The ECB is also considering the introduction of a system that limits the scope of application of negative interest rates to banks, but Mr. Kiuchi says that opinions are broken in the ECB, and that it is necessary to adjust difficult opinions. .

“Guru” Lagarde for opinion adjustment

There are voices in the market who are worried about the appointment of Mr. Lagarde, who has no experience as a central bank governor. Analyzing.

The organization behind ECB's point of view is the organization of the ECB.

The Board of Directors, which decides on monetary policy, is a congressional system consisting of 25 people, including the Governor, Deputy Governor, 4 Managing Directors, and 19 Central Bank Governors. Not only policy but also political skills such as which government bonds should be bought in the event of a debt crisis, and coordination with other countries, "said Lagarde's experience as a finance minister and IMF managing director I think that there is a possibility to make use of.

Keyman is “genius” born in Ireland

Mr. Lagarde, who is expected to be a coordinator, is the Philip Lane Chief Economist from Ireland who is expected to support monetary policy in practice.

Mr. Tanaka said that Mr. Lane is a world-renowned economist and a trustworthy person from Draghi, who said, “Basically, it will take over the Draghi route and inherit the pigeon policy. In the ECB where there are various opinions, I would like to see Mr. Lane think about monetary policy management and how Mr. Lagarde puts his opinion together. "

How Germany's top influences

As the keeper of the European economy, the European Commission is responsible for the economic policies of the euro area.

Professor Endo Endo, Hokkaido University Graduate School of Public Policy, who is familiar with the EU, mentioned that French and German graduates were chosen for the post of the ECB President and the European Commissioner. “Germany and France cooperate to unite Europe. “It ’s a chance.”

In addition, it is pointed out that the monetary policy and fiscal policy, such as flexible fiscal spending, should be promoted in a coordinated manner in order to bring the economy to a standstill, while monetary policy alone cannot expect an economic recovery.

In this regard, Professor Endo pays attention to the fact that Mr. Von D'Arien shows his perception that “austerity of austerity is not good”.

Speaking of Germany, until now, based on the principle of not increasing the country's deficit, other countries have not lost their stance to demand fiscal tightening.

Prof. Endo analyzes that Mr. Von de Alien may show a more flexible attitude. “Because I am from Germany, I want to protect the principle of structural reform, productivity improvement, and fiscal soundness. But it ’s a sight to see how creative the fiscal policy is going within the rules. ”

In addition to the economic downturn, Europe has become increasingly divided, such as the rise of anti-EU populism and the issue of withdrawal from the UK. How will the two leaders who will be the new faces solve the pile of challenges?

In the face of economic powers such as the United States and China, we are entering a major phase where it is necessary to maintain our presence.

Taichi Soga, International Reporter

Entered in 2012, Sapporo Department, etc.