Markets without secrets

On April 6-7, international forum "Scenarios of Economics and Finance" was held in Cernobbio, organized by The European House - Ambrosetti, which brought together several hundred politicians, economists and financiers from around the world to talk about the economy fate of Europe and Italy in particular.

There were two profile ministers of the European Union, but there were no Italian government members. As there were not any of them at the Confommercio Forum, which was held a couple of weeks ago (Confcommecio - Association of Italian Businessmen and Entrepreneurs). In Italy passed parliamentary elections on March 4, which did not reveal a clear winner. Therefore, the process of forming the government has obviously dragged on, the old government is retired, but there is still no new government.

The numbers of the Finance Workshop 2018 – Infographic, source ambrosetti.eu

In the absence of the government, we had to talk about Italy after all. In the opening speech of The European House - Ambrosetti CEO Valerio De Molli noted that a positive trend has been observed in Europe (GDP growth of 2.4% and a 73% employment record), while Italy is lagging behind other countries.

The country's economy is heavily influenced by foreign debt of 2300 billion euros (132.1% of GDP), and each year only to service this debt takes 66 billion euros. He cited forecasts of external debt ratio to GDP by 2023 - from 112.7% to 149.4%. But the spread is so large that I would give my forecast: highly likely, it will remain at around 129 - 136%.

Valerio De Molli, head of The European House - Ambrosetti (left) and forum participants (right), photo © Evgeny Utkin

De Molli also noted the negative effect of BREXIT, and if for the countries of Europe, according to his forecasts, this will affect the GDP fall by 0.1-0.3%, while for Britain it will affect the GDP fall by 1.3-4 , 2%. Therefore, Britain should now find additional finance to cover this gap.

Forecast table, source ambrosetti.eu

But the Forum participants, in general, were calm about the exit of Britain from the EU. To the question: "How will BREXIT affect the investments in your company?", 55.7% answered "in no way", 14.4% - "positively" and 23.7% - "negatively". This is very similar to the poll last year.

And to the question "What are the main aspects that negatively affect the development of your business?", BREXIT stood at the end, next to "IGIL and instability in the Middle East", respectively, 8.8% and 7.7%, and the main negative factor was "Italy's political instability and its influence on Europe", 39.6% and "Trumponomix", with 33%. Russia was not among the negative factors.

Valdis Dombrovskis (left) and Jyrki Katainen (right), EU ministers, photo © Evgeny Utkin

Generally speaking, all the meetings were held behind closed doors, and it was possible to understand what was going on only from the conversations of the participants. Therefore, the most accurate and interesting indicator was electronic surveys of participants, they appeared immediately (and there is on the web site of The European House - Ambrosetti).

For example, they talked about the Asian region ASEAN. According to the survey, it turned out that most of all China affects this region (74.2%), then the USA (11.7%), and further Russia and the EU shared third place, with 5.8%. That's right, China is far ahead of the US, at least in ASEAN. The participants highly appreciate the work of the ECB, 73.4% "very good" and "good", 17.8% "satisfactory", and only 8.2% "bad" and "very bad".

All meetings were held behind closed doors, photo © ambrosetti.eu

It is worth paying attention to the forecast for oil prices (when voted, prices were about $ 68 per bar.). A year later, half thinks that prices will remain in the range of 60-68 dollars, 31% believe that they will rise to 68-80 dollars, 1.6% believe they will be above $ 80, and finally, about 15% will fall below $ 60 . That is, they predict stability in the price of oil.

Well, going back to Italy, to the question what are the main measures to increase the competitiveness of the Italian economy and attract foreign capital - obviously won "to secure rights and a stable tax system", "to reduce the tax burden", "to ensure a stable government".

Evgeny Utkin, Cernobbio, Italy

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