Effetto virus su debito, Ue, Usa-Cina. I report di Goldman Sachs

Qual è l'mpatto della pandemia da coronavirus sul debito pubblico degli Stati? Quali conseguenze sull'Europa che già nel primo trimestre del 2020 ha mostrato una recessione pensante e destinata a diventare ancora più dura? E ancora, che cosa accadrà alle relazioni tra Stati Uniti d'America e Cina? Le risposte in tre report che Goldman Sachs ha appena pubblicato e che Affaritaliani.it pubblica in versione originale.

Top of Mind: Daunting Debt Dynamics

Government deficits, debt issuance and debt levels are set to surge as countries race to ease the economic impact of the coronacrisis. This raises many questions: who will finance this debt, will it force a market repricing and/or an eventual growth or inflation problem, and would greater use of negative rates help avoid any of these risks? At the same time, whether corporate bankruptcies could derail the economic recovery is a key concern. In short, how disruptive the recent, dramatic shift in debt dynamics might be is Top of Mind. We consult Harvard Professor Kenneth Rogoff, University of Pennsylvania’s David Skeel, and GS’s own Jan Hatzius, Praveen Korapaty and Sylvia Yeh on these questions. Our key takeaways: the benefit of running large deficits today far outweighs any eventual costs; DM bond yields are likely to rise modestly as a result; worries about distress in EMs are largely warranted, in munis are mostly not, and in the Euro area are somewhere in between; and a likely wave of corporate bankruptcies could prolong—but likely won’t derail—the economic recovery.

European Daily: Short-time Work at Work

Activity contracted sharply in the first quarter of 2020 across the Euro area, yet unemployment rates remained broadly unchanged. We argue that this uncharacteristically muted labour market reaction is largely attributable to unprecedented recourse to short-time work (STW) schemes, which are designed to shield employees from job losses.

With between 17% of employees in Spain and more than 45% in France placed in STW schemes so far, take-up rates have increased by an order of magnitude across the largest Euro area countries compared to the Global Financial Crisis. This strong take-up reflects both improved access and generosity, but also the nature of the shock with virus containment measures heavily affecting labour-intensive services.

While short-time workers technically remain employed, their working hours fall involuntarily and we hence expect the “U6” underemployment rates to reach new historical highs in 2020. By contrast, the narrow “U3” unemployment rate is likely to remain artificially compressed as STW prevents large-scale employment losses. We therefore revise our 2020 unemployment rate forecasts to 4% in Germany, 9.5% in France, 12.6 % in Italy and 18.8% in Spain.

Global Policy Comment: US-China Tensions and Bilateral Policy

The COVID-19 pandemic has led to an increase in confrontational political rhetoric in the US and China. In the US, in particular, politicians in both parties have stepped up criticism of China’s handling of the coronavirus.

In a few recent cases, the Trump Administration has actually changed policy with respect to China, although so far most of these changes appear to have been in process for some time and might not reflect a sharp shift in the Administration’s stance.