The prospect of a second diving is before us

The prospect of a second diving is before us. The risk, this time, is primarily European, but an impact to the US where the recovery is precarious, as was the case in 1931-1933, cannot be excluded.

The crisis of 2007-2009 had a double base, the collapse of a financial and real estate bubble grows into a banking crisis, and a global crisis of over-accumulation of capital. Of the latter, China was the main source, but it exported its consequences with its capital and its goods.

This was not a crisis of underconsumption and the policies to the recession have avoided the classic cumulative process via the fall in demand for household. Of course, the Germany played early on the decline in consumption to increase its exports, with the collapse of the housing bubble, the credit crunch and the recession itself, consumption decreased in the United States, although she resumed today. In France, it held relatively well. Today, if the recovery is strong in emerging markets, it is fragile in the United States, barely perceptible in Europe and the Japan is in deflation. Then, the end of the tunnel It is doubtful, a demand shock, first that of households, is likely.

From a point of the General view, the transition from active policies - necessary to avoid economic collapse - to policies to absorb the excess liquidity and reducing deficits led to a very difficult to manage conflict, and not only for reasons of timing. Indeed, in the absence of such policies of reabsorption, the risk is not only a sovereign debt crisis, as seen, but in the longer term, is to reconstruct the conditions of new bubbles, so a new more serious crisis yet. However, austerity policies may cause a second dip. Europe is in first line, but does not have a monopoly on austerity policies and the United States will not extend their policy of support of the economy.

Why especially Europe, the euro area, since throughout the recession has reduced revenues while the fight against the crisis increased spending The United States, more Great Britain or the Japan have no significant budget deficit and debt problems This is the essential feature of the euro area: the existence of a single currency with different national economic policies, where a risk of explosion. If the sovereign debt crisis started by States whose finances are the most fragile because of policies inconsistent (Greece, Portugal), near and close is the Spain, the Italy, or France, which may be affected.

More generally, the absence of cooperation centralized in Europe leaves the flange on the neck to the logic of competitive deflation while the solution would be to maintain comprehensive policies agreed until the end of 2011. Assistance to the Greece plan is recorded, but it is accompanied by a strong dose of austerity affecting the income of households, and rigorous already imposed on the Portugal to the Spain. Each nation is doomed to follow the austere strategy, those who play the step being sanctioned (and especially when the playmaker, Germany, non-cooperative play). Therefore, how to avoid a contraction of demand in Europe

In addition, strong deficit countries rely on a recovery to reinforce their tax revenues. But this recovery is already condemned by these same policies, deficits will grow. And if the sovereign debt crisis develops, it could degenerate into a banking crisis, as devastating as that due to the "sub-prime". With this difference that today ' hui banks are undermined and States have more ammunition: interest rates are already very low, the creation of liquidity has been considerable, the bark of public finances is very busy and public opinion are disgruntled.

The solution is known to all, but there is no point jumping on his chair by saying "European economic government." in the crisis, Europe without rudder cannot back the wind. Even if the second diving is avoided, it will suffer a new decade of stagnation.