All experts suggest that Donald Trump’s tariff program is tremendously inflationary, there are even experts who ensure that the United States CPI could amount to 4% in one year. The problem of all this is that “80% or 90% of tariff II Bundesbanknaveguing forum in times of change: geopolitics, inflation and economy.
The person in charge of opening the event was the representative of the Bundesbank in Spain, Fabian Huttner, who made a brief review of the economic situation of Germany that described as “sustained weakness.” Even so, he encouraged to see the situation from the side of optimism, not forgetting the structural challenges that the new government will have to face the polls on February 23.
Already in matters, at a moderate table by the director of electionomista.esAmador G. Ayora, González-Páramo said that Donald Trump’s economic policy to pay tax drops with what he collects through the imposition of tariffs “will have negative effects in the medium and long term”, since “All these measures have an impact on inflation” and that is precisely what dethroned Biden of the Presidency, the feeling of consumers of the increase in the cost of life.
In this sense, in regard to the separation of the increasingly separate interest rates curve between the European Central Bank and the Federal Reserve, the economist reiterated that in the short term “there could be a widening.” In fact, he assured that it is possible that the Fed, taking into account all this, Do not move types throughout the year. “I wouldn’t be surprised,” he reiterated.
As for the four possible declines of interest rates raised by the European Central Bank for this year, González-Páramo was very clear: “I do not see the scenario in which four more descents are justified.” Especially when Donald Trump’s policies could spread an increase in inflation to Europe.
The base scenario is that I think we are going to reach an inflation of 2% in the middle of the year and the energy costs will cushion the impact of tariffs, “said the expert. That is why he reiterated that this year we may stay this year in a type around 2.5% to 3%.
European situation
Germany and France, the two great economies of the Eurozone, are in the spotlight and the expert also commented on the details of what that waiting in the short term in these countries.
In the German case, he talked about the fact that there is most likely a government “mainstream”, that is, made up of the CDU and the SPD, “even with the green,” he said. But the inconvenience of the expert in this is that on February 23 a Budestag was in accordance with the parliamentary arithmetic that prevents the constitutional reform of the debt brake “for the rise of the parties of the extremes,” he said.
“Germany has to face some expenses that are necessary by virtue of fragmentation, the digital problem or the problem of energy. How are you going to undertake investments with the debt rule that there is right now?” Said the expert.
In the case of France, the expert ventured even to talk about the need for early legislative elections: “France is divided into three blocks of almost the same weight. The government that has now, the greatest merit it has, is that of having survived, but its ability to govern is hard.
In the entire conversation, the Draghi and Letta reports were very present, in which they talk about the need to improve the competitiveness of Europe and how to carry it out. Two reports commissioned by the European Commission and that are the roadmap to follow by the president, Úrsula von der Leyen.
In this sense, González-Páramo is very in line with what is raised in the financial union and markets in Europe. In fact, he reiterated that in defense matters, a topic that is currently very hot within the EU and NATO, “there are common defense elements that can be financed with joint debt issuance. It is cheaper. Debt would not compute and the fiscal arrangement is from the EU, “he explained.
#José #Manuel #GonzálezPáramo #Trumps #policies #harmful #economy #medium #term
