ECB’s Trichet backs austerity measures

Chemical companies, Consumer demand, Economic growth, Financial Events

EU finances.pngLast year, governments focused on stimulus measures, to support the global economy.

Now Jean-Claude Trichet, head of the European Central Bank (ECB), says that “with hindsight, we see how unfortunate was the oversimplified message of fiscal stimulus given to all industrial economies under the motto ‘stimulate’, ‘activate’,’ spend’!”

Writing in the Financial Times, he is effectively calling for a 180° change in policy. Instead of providing further support for auto and house sales, he wants governments to cut expenditure, and focus on “fiscal sustainability“.

He forecasts that Eurozone government debt will rise by 20% between 2007-11, and by 35%-45% in Japan/USA, and warns that “the economy may be close to…a rapid deterioration of confidence among broad constituencies of households, enterprises, savers and investors“, due to:

• Lower tax revenues as a result of the downturn
• The cost of the recent spending increases
• The “volume of taxpayer risks” created by the need to prevent financial sector collapse.

He warns that potential liabilities in this latter area are now 27% of GDP in the Eurozone and the USA.

Trichet concludes that the ECB “expects governments to confirm their determination to consolidate their public finances“. It is hard to under-estimate the potential significance of his comments for chemical industry demand in H2 and 2011.


China's auto and housing markets weaken


“There are 64.5 million empty apartments and houses in China’s urban...

Learn more

US company earnings soar, sales disappoint again


The blog’s quarterly look at US company earnings reveals a worrying trend....

Learn more
More posts
Smallpox was the first vaccination to change the world – now we have a new opportunity to improve our lives

Chart 1: Increased life expectancy led to a dramatic increase in GDP/capita The pandemic has reminde...

COP 26 set to accelerate development of the 15-minute city

One of the good things to happen in the pandemic over the past year is that ‘cooking has becom...

Circular economy set to replace today’s broken global supply chains

The Great Freeze in Texas has confirmed once again the problems with today’s global supply cha...

China’s dual circulation policy aims to reduce debt reliance

Every now and then, people wake up to the fact that debt is only good news when it adds to growth. O...

UK set to take hard line on EU trade under David Frost

The Brexit debate has always been about politics, not economics.  So it was no surprise that Decemb...

Smartphone sales highlight new trends in consumer markets

Smartphone markets continue to provide early warning of the major changes taking place in consumer m...

EU focuses on a sustainable and circular plastics system

“The challenges posed by plastics are to a large extent due to the fact that our production and co...

Buyers scramble for product as global supply chains breakdown

Asian LNG prices reached $32.50/MMBTU this month, up from less than $2/MMBTU in June. The Shanghai C...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more