Sylvain Broyer, Chief Economist at S&P: “The challenge going forward will be to rebalance growth models”

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When fatalism takes over, listening to optimistic points of view – however moderate – is a little breath of fresh air. The chief economist for Europe, Middle East and Africa at the S&P rating agency, Sylvain Broyer (Lyon, 49 years old), is one of those voices: he is not very concerned about the increase in debt as long as interest rates remain low. minimums and central banks remain in activist mode. That, coming from a rating agency, is important. In conversation with EL PAÍS from his home in Frankfurt, Broyer predicts that the entire EU – including the hardest hit countries, such as Spain – will return to the pre-crisis level throughout 2022.

Question. He wrote recently that the European recovery was being faster than was initially feared. But that was before the sprouts. Where are we now?

Answer. We are entering what we could call “phase three” of recovery. After the recession we had a very strong rebound, more than expected, in the third quarter. The problem is that it was only with the reopening of the economy and now we are at a critical moment, a kind of transition period in which governments are going to progressively reduce aid programs. Although lower, growth will continue in the coming quarters and will accelerate again in the middle of next year, with European disbursements.

P. That, in a scenario in which there are no more strict confinements like those of spring.

R. Yes, in that case we would rather go to a recovery in W.

P. The ERTEs, in their different modalities by country, have contained the blow of the crisis on the labor markets. Is it too early to talk about success?

R. The best measure of success is that even the UK has copied this scheme from Germany (laughs). In the German case, during the financial crisis of 2008 and 2009 [el kurzabeit] it has already avoided job losses in the medium term and the destruction of human capital. But for these plans to be successful, the recession has to be short. And the question is whether in some areas of the service sector, the hardest hit, demand will recover soon: transport, hotels, retail … In these cases we can see a permanent unemployment rate since the last crisis due to structural changes in the economy. demand. But yes, from a macroeconomic point of view it is better to subsidize the labor market than not to do so: it would have increased the probability of an economic depression and would have jeopardized the recovery. That people keep jobs, even if it is working less than before, preserves human capital. And, individually, their chances of finding work in other companies or sectors are also much greater than if they had been unemployed.

P. And from the point of view of the public coffers?

R. The cost of these short-term job maintenance programs is much less than that of having large numbers of people unemployed over the long term.

P. How do you see Spain?

R. Recovery is slower. We are not seeing a decoupling of industrial production with respect to Germany, and that is positive because most of what is produced is for export. But construction is not recovering as fast as in Italy and France, and that is one of the most negative points in our short-term outlook. Part of this has to do with the unemployment rate being higher [que pesa sobre la demanda] and with which the restrictions have been greater. Mobility in Barcelona, ​​for example, is still 40% lower than before the covid, while in London, Frankfurt, Paris or Milan the drop is only 5%.

P. The fact that the industrial countries have weathered the blow better raises the question again whether deindustrialization was a bad idea.

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