2013 Coface Country Risk Conference
Panorama country risk - february 2013
A day to decrypt the risks and opportunities for 2013
The 17th Country Risk Conference held by Coface on 22 January 2013 has confirmed the complexity of a situation where, more than ever, the world seems to be «split in two»: advanced versus emerging countries. If the declining power of the United States still appears very relative, it is facing serious problems concerning the reduction of its fiscal deficits. And although the financial markets no longer believe in the breakup of the eurozone, the European Union is striving to think of itself collectively.
Growth will remain negative in 2013 in many member states and the rise in unemployment poses a key problem: people’s patience. Some of them, as in Germany, consider that the crisis is the result of non-virtuous states’ excesses. Others find it more and more difficult to accept the consequences of necessary but too brutal austerity measures and of structural reforms, the benefits of which will only be felt in the long-term.
Nevertheless, more than a tiny-stepped federalism is necessary in order to resume healthy growth and for a sustained revival of European industry.
The emerging countries, for their part, are likely to post above 5% flattering growth, according to Coface’s forecasts. But although their reactive and cautious policies have enabled them to withstand the global crisis, their vulnerabilities remain all too real: fragile financial systems, poor governance, and difficult economic, social and thereby political change to manage. These countries have introduced a new dynamic to the global
financial and economic game. But without asserting themselves as a driving force for change within the G20, nor accepting the counterparts of further international integration.
In commercial terms, while everyone welcomes the absence of soaring protectionism, subtler measures that hinder access to emerging markets are being implemented. And we should not forget the problem of exchange rates that disadvantages eurozone companies to the benefit of their American and Japanese competitors.
But this globalisation under pressure offers many opportunities. The rise of the middle classes in emerging countries is one of them, provided one takes into account the sheer diversity of countries such as China, India, Brazil or Russia.