Transcript Slide 1
ANSWERS TO THE QUESTIONNAIRE - Main conclusions - Are nowadays crises (uncertainties) a consequence of the globalization, or not? Give your opinion. • For one half of the countries the answer was definitely NO: globalization is not a cause of crises, but they are spread, transmitted and amplified by globalization. The other half of the countries points out to some evidence showing that globalization may indeed be an important factor behind nowadays crises. The US mortgage crisis was country-specific in origin, but oil and food prices increases could be regarded as a result of the globalization of markets. Crises appear more frequently with globalization, and global excess of liquidity in search of return could be considered a global cause of crises. In the present uncertainty conditions, what are the medium term prospects for the world economy? • There is almost a consensus that the growth slowdown will end in two-years time. The slowdown does not mean a recession and in the medium-term euro area should growth at around 2%, the OECD at 2.4% and the world economy at 4%. But there are shorter-term risks: the US mortgage and financial crisis could deepen and bottlenecks in energy and food supply could appear if innovative solutions are not found. Can these uncertainties be reflected in the macroeconomic forecasts? Are econometric models still relevant in conditions of sharp economic changes? • There is a consensus that with higher uncertainties the forecasting and use of econometric models become more difficult but uncertainties can be reflected and included. Model results should be interpreted more cautiously, and supplemented by expert judgment, more use of scenarios and further development of impact analysis. Does the crisis of prices (energetic resources and food prices) reflect the imbalances on the world market or does it have other causes? • The crisis of prices is a consequence of both demand and supply side factors. The slow increase in supply, affected also by high labour costs and insufficient labour productivity, failed to accommodate the sharp increase in demand. Moreover, speculative trading and geopolitical tensions had a negative impact on prices. Do you consider that uncertainties will increase the international migration flows? • The uncertainties are expected to lead to an increase in international migration flows because of conflicts and natural disasters (Sub-Saharan Africa) and economic reasons (Middle East, South Asia, Latin America). Returning migration from the host countries with slowed growth is expected. There are also opinions that the uncertainties will either decrease the pace of globalization and migration flow or will have a neutral effect on migration. Which are your expectations regarding the evolution of the EU economy in the medium term? • There is a common view among participants that the EU economy will grow below potential in 2008 and 2009 as it has been hit recently by a series of negative shocks. Opinions are diverging concerning the amplitude of the slowdown but it will be in any case broad-based in terms of GDP components. Participants generally think that the New Member States will be less affected than ‘Old Europe’. • From 2010 onwards, most participants foresee – in the absence of new shocks – a return to potential for the EU economy while Eastern Europe will continue its real convergence towards per capita income levels of Western European countries. • From a country-specific point of view, the participants see the main uncertainty as coming from external factors although some participants insist on the necessity to continue economic reforms at the country level. Will the EU member states still be attractive for FDI in the medium term? • EU will still be attractive to FDI in the medium term according to most participants but those countries but those countries showing the appropriate economic dynamism and implementing reforms will be favoured. • Yes, the enlargement is favourable to the expansion of FDI but the economic integration between ‘old’ and ‘new’ member states began already in the nineties with the prospect of EU accession. Some participants pointed out though that the current instable situation on the financial markets could favour old member states in terms of FDI inflows. Which might be the main sources of the labour force fluctuations in the medium term? • In general, demographic as well as socio-economic factors are given as factors explaining the evolution of the labour force. • Demographic factors are still expected to contribute favourably in view of sustained positive net incoming migration and socioeconomic factors will contribute positively through an increase in female activity rates and an increase in activity rates at the top and of the age scale. • Women participation to the labour force, population ageing and international migration are also considered as crucial factors by other delegates. The delegate of Lithuania points out to factors which should be specific to new member states, that is: the lack of specialists with required skills, low motivation toward work among unemployed, low and inadequate price of the labour force. The problem of skills is also emphasized by Romania, which thinks that FDIs will help to solve this problem. Do you consider the impact of ageing and demographic changes on the EU economy to be a major issue? How can it be limited? • There is a large consensus among delegates to consider ageing and sometimes the population decline as a major issue for the EU economy. However, the Belgian delegate thinks that this problem will largely materialize beyond the medium term horizon. • Delegates think that the problem of ageing can be limited by immigration as well as by policies aimed at increasing the participation of older workers in the labour force. Other measures considered by the delegates include: health care and health prevention as well as healthiness promotion measures, struggle against discrimination and adequate redefinition of social security systems. Finally, supporting the birth-rate is also advanced as a solution. Is the concept of knowledge based economy promoted sufficiently in your country? • The knowledge based economy seems to be or to become one of the priorities of the governments of the different countries. The Latvian delegate considers however that this concept is not promoted sufficiently in the country. Conditions and concrete measures to attain the Lisbon objective of 3 percent of GDP in R&D spending are given by most delegates. Among them they point out for instance to the promotion of innovations, the development of favourable investment environment, the creation of competitiveness poles and more generally the improvement of education system. • Some delegates think however that it will take some time before ‘we see the results’.