Like a marathon

«We live in a climate of uncertainty where any statement is immediately denied.
Despite the complexity, it is still necessary to reiterate the reasons for peace". Paolo Magri's gaze is broad. As vice president of ISPI, he has been accustomed for years to reading major international trials. The current war scenario is only the latest element of uncertainty, after the great crisis of 2007 and the pandemic.

TODAY'S WORLD APPEARS MORE DIVIDED. THE SAME IDEA OF BORDER IS REMIXED…
«After 1989 we deluded ourselves that borders no longer had the value of previous years. We have seen the expansion of globalization: unprecedented circulation of goods and people. In reality, since 2008 with the financial crisis we have understood the importance of borders to curb the excesses of international speculation. Then terrorism and immigration generated new attention to borders and new walls even within Europe. Later Trump with protectionism.
Finally, the pandemic that has made the closure of borders an instrument for containing the virus. Currently, the energy crisis is pushing us in the same direction: closure and defense of the national interest, diversity as a danger to defend against.
From the "flat" world we have now moved for years to a rebirth of borders, seen as extreme remedies for the evils of these times. The icing of a traditional war like the one in Ukraine falls on this cake, where the borders, the moving back and forth on the territory (invasion), are a determining element that brings us back to the twentieth century in a plastic way».

IN A CONTEXT OF WAR, INVESTMENTS FOR WEAPONS ARE INEVITABLY GROWING TOO. UNTIL WHAT POINT?
«It is clear that we are also experiencing a phase of rearmament in Europe. But there is one point to consider. At an economic level, the darkest hour has yet to come and it is difficult to imagine that further and massive investments in armaments are possible.
To what extent is it right for example to arm Ukraine? I believe that it is right to fight an invader, but it is legitimate to ask questions. The situation is degenerating into an endless escalation and many initial elements are outdated. If we want Ukraine to defend European values, then we need to establish the rules of engagement."

HOW ARE THE ECONOMIC CONSEQUENCES OF THIS INSTABILITY ADDRESSED?
«We must be clear in saying that the economic difficulties we are experiencing are not all related to the war. Let's go back a year. With the pandemic, states have increased their debt.
Even before the war we knew that the cycle of expansive monetary policy would end and that globalization had some ailments: trade duties, long supply chains of raw materials stopped by Covid.
We were talking about the energy transition, but we knew it would involve some inflation, because we would have paid a little more for everything to have the same things. It is in this context that the war came and made us understand that where armies pass, goods no longer pass.
The people who flee (the millions of refugees) pass by, but the grain no longer passes, the energy no longer passes.
As the IMF has said, we are facing crisis after crisis.
And everything is more complicated ».

BECAUSE?
«If you have a major crisis, even of a magnitude greater than the one we are experiencing, the probability of finding policies to deal with it exists. But when you find yourself having so many crises all at once it's a problem. There is the risk that to face one crisis, we discover the side of another. I give an example. Stopping inflation usually requires raising interest rates and cooling the economy, but such a policy risks creating a huge recession. With the paradox of starving people, losing savings, impoverishing incomes».

WHAT SHOULD WE EXPECT?
«Let's cross our fingers, we hope that the economists get everything wrong, but there is concern about the model for the next few years. The uncertainty of these months acts as a multiplier. The covid itself has been an accelerator of pre-existing crises, but it is as if the war in Europe has multiplied this acceleration. There is an image that for me describes these last few years well. It was like a marathon.
A year ago it is as if we had seen the arrival: the economy was restarting, tourism as well, together with optimism.
But suddenly we were faced with a military, humanitarian, food and energy crisis. The Turkish-French economist Nouriel Roubini, who first anticipated the 2008 crisis, has published a book on today's ten megathreats. A very hard analysis on a scenario that we cannot exclude. I repeat, let's hope he's wrong."

By the editorial staff
NPFOCUS
NP November 2022