Polish former deputy PM opens Lausanne summit’s second day
InvestmentEurope’s Fund Selector Summit second day kicked off with a keynote speech by former chairman of the National Bank of Poland Leszek Balcerowicz touching on Ukraine and Europe’s return to growth.
The second day of InvestmentEurope‘s summit started with a vigorous speech by post-Communist economist Leszek Balcerowicz (pictured) who started by warning against the recent crisis between Russia and the Ukraine.
“The invasion of Ukraine was a violation of the most fundamental European treaties,” he said addressing the audience.
While conducting a series of parallels with China, Balcerowicz also warned his audience to be weary of the way Russia is using gas and natural resources as a weapon in its international relationships.
Looking more closely at the recovery in the Euro area, Balcerowicz spoke in favour of fiscal consolidation and austerity measures. “Greece, Portugal and Spain are recovering. This means that fiscal consolidation does work overtime.
“Austerity has become a bad word throughout Europe, but we have to acknowledge that without it there would have not been a recovery,” he said.
Speaking specifically about the Greek case, Balcerowicz however pointed out that increasing social spending cuts would have benefitted the economy more than the tax increase actually implemented by the government.
Addressing the recent concerns of deflation in the Eurozone, Balcerowicz highlighted the urgency of returning to a normalisation of monetary policy in Europe, criticizing that EU monetary policy was “dictated by the FED” and stressing that the suppression of interest rates “went too far.”
At the same time, he argued that the threat of deflation in Europe was “hugely exaggerated” and criticised the IMF for likening Europe to the US in the 1930s. Instead, he argued for a growing integration of the European financial sector, while the policy responses to the respective macroeconomic challenges of European countries should remain country specific.
During a lively and widley participated Q&A, selectors asked Balcerowicz whether European politicians will manage to cooperate to find a sustainable growth plan for Europe.
“Until there is evidence that EU politicians cannot cooperate, I would assume that it is possible for them to do so.”
The day will continue featuring sessions by M&G Investments, Ignis Asset Management, GAM, Old Mutual Global Investors and BlackRock.
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