This morning, Martin Buxant received Georges Ugeux, economist and former vice-president of the New York Stock Exchange, on LN24. The economist first returned to the recent warning from the European Commission to Belgium concerning an excessive budget deficit. “I think we entered a phase where countries lived on debt where there was no interest rate. But now, with inflation, debt costs money. also mean interest to be paid in the annual budget with the refinancing of debt with higher rates. So we have entered a phase where debt hurts and has a cost. This should never have happened. From the when we finance the functioning of the State with the debt it has to end at some point”he summarizes.
But then, what solution is available to us to rectify the situation? Georges Ugeux wants to be pragmatic and does not envisage happy days in the immediate future for the population. “From the moment you have easy money, you also spend easily. We have to go back to the blackboard and look at what we are spending exactly to cut what is not necessary. I hope we can manage to get through this period in a way that is not socially problematic. Because when the state is no longer there to support, some people will start to suffer and it is not the wealthiest”he warns.
Could the American economic model, where everything must be financed individually, ultimately be an avenue for Europe to explore given the current context? Georges Ugeux does not think so. “Europe has a lot more solidarity in its system and that is probably why it is evolving less quickly than the United States economically speaking. But for me, the model of solidarity is more important than ever. Unfortunately, given the budget deficit, this still means that there will not be measures for everyone.” In fact, the economist recommends a whole series of reforms to try to reduce the annual budget as much as possible. In particular, he advises not to increase current operating expenses. “We have to spend on the climate or on the energy transition, but in terms of spending on non-productive activities, there is a way to act. This necessarily implies that the private sector takes over.”
At the end of his interview, Georges Ugeux also returned to the relationship that Belgium has with China. For the economist, the time has come to change tone. “From an economic point of view, Xi Jinping made a lot of mistakes and everything is coming back to him. I think this is a privileged moment to start a dialogue with this leader who has been weakened. I don’t not say that we will get there but we have to try. We have to tell him that we are ready to continue to invest in China but not in the current one. We are important customers for them, while being suppliers, So we have a double position in the Chinese balance sheet. They also need us. Will the ideology give way to a certain pragmatism? We have to test it.”concluded the former vice-president of the New York Stock Exchange, on LN24.
