How might the financial future of Europe be shaped by events of the past?

CGTN Europe interviewed Vicky Pryce, International Economist

Transcript

00:00Well, let's talk now to Vicky Price, the international economist and business consultant.

00:04Welcome back to the programme, Vicky.

00:06So, clearly this is a 25-year period we're talking about.

00:08We ran over some of the changes seen economically.

00:11But if you had to pick one, perhaps two, what have been the most significant economic shifts we've seen?

00:18Well, I can't just pick one, but the financial crisis was absolutely fundamental

00:23in terms of establishing a sort of new order across Europe and also sort of across the world

00:30because a lot of the perceptions that were there before that we can now move from being industrialised

00:36to being perhaps de-industrialised but actually relying on services, particularly financial services,

00:42was blown apart, really, by the financial crisis.

00:44And what it did do for many countries in Europe and elsewhere

00:48is it sort of started this long process of quite slow growth, quite slow productivity,

00:53improvements and, of course, the austerity measures that your correspondent was just talking about anyway,

00:59which have left a long, long legacy of pain for many countries,

01:05but also making it difficult to re-establish the fast growth and, if you like, also optimism that was there before.

01:13And I think that has led, strangely, also to Brexit in a way,

01:18because there was austerity in the UK in the early part of the 2010s.

01:22And that, of course, didn't go down particularly well with the population.

01:26Lots of jobs were lost.

01:28And when they looked across and saw the problems that were going on in Europe itself,

01:33whether it was Greece or all the other countries,

01:35and the inability of the Eurozone to get its act together and get out of this problem quickly,

01:41that also contributed to the concerns about do we really want to be part of Europe or not,

01:47and the Brexit vote.

01:47So do you think that lessons have been learned and perhaps the upcoming challenges will be informed by what's gone before?

01:54Yes, but, of course, the upcoming challenges are going to have some difficulty in terms of being faced

02:00because partly due to the financial crisis, partly due to what happened with the Eurozone,

02:05partly due to the austerity period when we tried to deal with the debt,

02:08what we saw was that debt was accumulated nevertheless.

02:11It got worse with COVID.

02:13It got worse with the war in Ukraine.

02:15And we've ended up with many countries now less able to react if there is another crisis to changing circumstances

02:23and being able to borrow and spend more than would have been the case otherwise.

02:27So it is difficult to deal with the challenges.

02:29And there are many coming, and they're coming rather fast.

02:33Don't one mention the tariffs in the U.S. and the uncertainty that they have created.

02:39Vicky, pleasure to speak to you.

02:40As always, Vicky Price, the international economist and business consultant.

02:43Thank you very much.