CEMAC zone: recession could reach 6% according to BEAC

All the indicators are certainly not red. But most of the economic indicators in the six countries of the Economic and Monetary Community of Central Africa (CEMAC) are already found the Monetary Policy Committee (CPM) of the Bank of Central African States (BEAC) at the end of the second annual session on June 24, 2020 in Yaoundé.

Analyzing the situation in Central Africa, it emerges that in the short and medium terms, the CEMAC zone is affected by the health crisis and the fall in the prices of the main export products. "

"In the first half of 2020, the revival of productive activities was slowed down in the sub-region by the disruption of supply circuits for imported products as well as by the restrictive measures adopted by the various governments to contain the effects of the pandemic. Although it is premature for the moment to fully grasp the impact of COVID-19 on national economies, it is already anticipated during this first semester a drop in production as well as a det…

Shield, collective reconstruction, green growth ... Christine Lagarde gives her anti-crisis remedies

According to the President of the European Central Bank, a shield to protect the economies of the euro area must be maintained as long as necessary. The boss of the ECB stresses the importance of a collective budgetary response and sees the pursuit of green growth as an absolute imperative. On the other hand, it rules out any deletion of debts.
 
European Central Bank

With the pandemic of the new coronavirus which has already killed lot of people worldwide, the economies of the planet are seeing their muscles atrophy. Christine Lagarde, the patron of the European Central Bank (ECB), spun the metaphor of a sportsman forced to stop his training.

"This health crisis is terrible. It will inflict very significant damage on all the economies of the world", including the European economies and that of France, which recorded, in the 1st quarter of 2020, its worst performance since 1945 with a contraction of the GDP of 6% according to the first estimates of the Banque de France.
"The situation is unprecedented in recent history. It is a bit like an athlete who suddenly had to stop training and, as a result, sees his muscles gradually atrophy ", she explained.

Maintain a protective shield

Today, "the whole mission consists in continuing to do a little training so that the day when we have to start again we are not too weak and that we can start off again," she continued. . The President of the ECB, however, said she was "skeptical" about the conditions for restarting when the time for recovery comes.

"All we know is that the longer the confinement time, the greater the economic damage that will result and the laborious restart for certain sectors. Some sectors will leave very quickly and very strongly, and for others will be longer, "she warns.

However, the former minister and former head of the International Monetary Fund believes that containment should last as long as necessary. And, the action of the ECB, which acts "as a shield" to protect the economies of the euro zone by injecting liquidity so that the banks continue to lend, will also last as long as necessary.

When asked, will this crisis be less painful than that of 2008? Christine Lagarde replied: "I would like to believe it but I am not convinced. This very brutal and temporary crisis will inflict damage on our deep economies and we will take time to recover", she insisted.

Collective reconstruction is vital

Asked about the cleavage of the countries of northern and southern Europe on the issue of coronabonds, these common European obligations which would allow the cost of debt to be pooled, which will explode in all the Member States, Christine Lagarde said "progress recorded" during the last Eurogroup marathon meeting, which however still ended in failure.

In an interview with the Parisian, however, she called not to focus on this financial instrument, stating that other forms of pooling could be found. "A collective reconstruction fund collectively funded, with all the signatures that come together, would be great," she said.

Erase debts? Unthinkable!

"I hope that this sense of collective that emerges will be able to continue with the reconstruction, which will be a decisive moment. There is incredible progress that has been made," she said. In a column, published Wednesday evening in the newspaper Le Monde, the president of the ECB called on European states to "be side by side". "If all the countries do not recover, the others will suffer. By showing solidarity, we are actually serving our own interests," warns Christine Lagarde. "It is vital that the budgetary component in response to this crisis is powerful enough throughout the euro area. Governments must be side by side to deploy optimal policies together in the face of a common shock for which no one is responsible" she wrote.

What about an outright deletion of debts from different Member States? "It seems totally unthinkable to me," replied Christine Lagarde, without hesitation, to a France Inter auditor. The president of the guardian monetary institution of the euro has also stressed that it would take "much longer" than two, three, five or ten years for the euro area states to get out of this debt.



Green growth, an absolute imperative

According to the boss of the European Central Bank, Europe must take advantage of the current crisis to accelerate the energy transition.
"The absolute imperative is to move towards so-called green growth that is respectful of our environment," she said.
"Today what we see is that the way in which we have not sufficiently respected biodiversity, the way in which we have not sufficiently respected our environment is returning to us in boomerang in the figure ", she believes. It anticipates a collective review of a series of principles on the control of our supply chains, possible relocations and different choices, particularly in the food sector.