At the menu, given the time which would rather have recommended having a nice dinner, the activists had come to “drink in” the words of the Vietnamese-born economist and current member of the European Parliament, Liêm Hoang Ngoc, who is also the National Deputy Secretary for Economy for the Socialist Party.
Two hours later, and after having interacted and discussed with over a hundred members of different sections of the Socialist Party Federation of Nice, we took the opportunity to interview Liêm Hoang Ngoc on the current economic and financial situation.
Nice Premium: Professor Liêm Hoang Ngoc, what is your opinion regarding the current financial situation? We thought we had turned the page after the 2008/2009 crisis, and here we are again in turmoil.
LHN: Indeed, the situation is far from being resolved. Speculation has returned stronger than ever on financial markets, and political authorities were unable to react with the necessary speed that the context demanded. It’s like a disease: If the treatment applied is not appropriate, the disease progresses, and then everything becomes much more difficult.
I think the ECB should have reacted as the Federal Reserve did in the USA in the fall of 2008, that is, by buying Greek state securities and bonds at zero rates to support it before speculation could take over its economy and force it to accept the draconian conditions of the ECB and the IMF, which will prevent the economic recovery of this country for several years.
Now everyone sees the Greek economy as dying, but that doesn’t reflect reality. After the 2008 crisis, everyone came out weaker, and this was even truer for the less strong, including Greece. That’s why the ECB should have intervened and not left Greece alone in the face of speculation, which was more unleashed than ever.
N-P: There is an evident lack of solidarity in European action. The strong states should or should have helped the weaker ones more. It would also be in their interest.
LHN: Absolutely. The reasoning is simple. European economies are interlinked since they operate in the same markets and with the same currency. Therefore, if there is a strong economy, it is because there is a weak one.
Weakening the weak does not make it stronger but deprives it, on the contrary, of markets that probably make it strong.
There will be no prosperous Europe without the Northern states helping those of the South to at least partially catch up.
The interest must be general, and equalization or at least the elimination of the most marked differences must be done upwards.
N-P: So more “federal” Europe and less of the European Council of Presidents and Heads of Government…
LHN: The lack of political initiative from the Commission is striking. It is the Presidents of the strongest states who make the proposals and take the decisions.
During the Greek crisis, did we hear from Mr. Barroso?
We all wondered what Ms. Merkel would have done, who naturally takes her decisions based on the problems and interests of Germany and her voters.
N-P: Your prediction for the near future…
LHN: It is obvious that the markets are making a mistake once again. Whereas two years ago, they underestimated the situation of the American economy, whose indebtedness was at the origin of the global financial crisis, today they are making the same mistake but in the opposite direction: Greece is not in as bad a position as is believed, and even less so Spain and Portugal, which seem to be the next targets of speculators. These are countries in difficulty but quite capable of setting their accounts in order without having to comply with the conditions that the IMF and the ECB have imposed or will impose on them.
A too early exit strategy will have a negative effect in the medium term and will prevent a more solid recovery.
N-P: And France? Has it successfully negotiated the turn of the crisis?
LHN: Quite frankly, some mistakes that were made seem flagrant to me, but our country is economically strong compared to others, and speculation prefers to attack weaker countries rather than risk confronting more robust adversaries.
But I repeat, what matters today is the overall health of our economy, because without wealth creation, we go nowhere.
The number one problem of France is rather that of an unequal redistribution of the produced wealth, of which a too large part goes to the remuneration of capital, while another, increasingly smaller in recent times, goes to labor.
Everyone knows that wealth creation mainly comes from the consumption of lower and middle classes. On the contrary, in France, we have favored the wealthier classes.
This is not only a matter of social justice but also of economic health.
This is why the Socialist Party must make incisive proposals in this direction and explain them to public opinion. Economic liberalism has failed; it is time to return to a more supportive economy in the interest of all.
