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Linz (OTS) – “The rating agencies will become more important because we will discuss more mountains of debt and the assessment of countries by these agencies,” predicted Professor Teo Cocca, head of the Asset Management department of the Institute of Commercial Finance of the Business School from Linz at JKU, in the “JKU Corona Update”. “The degradation of Italy seems inevitable to me. This also has consequences for the monetary union, but doubts also arise about the stability of the rating in other countries. Even in the United States, because of the Trump administration’s budget policy, the question arose before Corona. In my opinion, it is clear that the very good rating of the United States will be a little worse, “said Cocca.
The reason for this is that if central banks are not supposed to be central banks, someone has to buy them. “Investors. And they need confidence in the stability of the countries,” says Cocca, who believes that the Corona crisis can cause great economic risks. The depth and consequent costs of the crisis will depend on how quickly the economy can start again. “The later the closure, the more difficult it will be to start.” In this context, Cocca welcomed the swift response from the Austrian government. “It is a courageous strategy, but it could also be more courageous.” But it was also important that the blockade situation in As many European countries as possible will last only a few weeks.
The great risks currently in the room are economic. “If a wave of bankruptcy begins or unemployment remains high or even higher permanently, this has immediate consequences: loans fail, leading to a possible banking crisis, which could lead to a possible currency crisis,” he said. Cocca. Currently, this is not yet a danger, but “when taking very unusual steps, it is also important for political actors to monitor potential risks. I’m not so sure if everyone knows that, from an economic point of view, some are playing with fire here. ” Especially with a view to the already unstable monetary union, this should be considered with special caution. “The euro is not in such a stable position that it could face a wave of bankruptcies in the euro zone. This is a very realistic potential danger. ” In this context, Cocca referred to the current role of the ECB and the European partners in dealing with Italy. “Nothing has changed in my assessment that Italy was the domino with the most dangerous fluctuations in the euro crisis. Conversely. And the discussion on the corona bonds shows how virulent the issue is. ” For Cocca, it is clear that Italy will need and receive European aid, even beyond the above scenarios. “Solidarity has to go both ways. We have to help Italy, but the money loaned must be properly managed. Italy, like Greece, will receive strict measures on its budgetary policy “
“Magic of scarce goods”: Austrians lack stationary trade
The current boom in hardware stores shows that the “magic of scarce goods” works, according to Professor Christoph Teller, who, along with his team, has published a series of surveys and results on retail in recent days. It is also clear to see that the government sets certain priorities when opening stores. Perhaps these are not entirely fair but understandable. “The opening of hardware stores follows the logic of ‘buy to stay at home’ and the restriction of stores to 400 square meters makes sense, because in these smaller stores customers can do better,” says Teller.
Teller also noted that Austrian confidence in the food trade was and remains stable during the closure phase. “Well-made food can only be said.” Even in regional online retail, you could see that they gave a clear sign of life in the difficult phase. For Teller, it is also a clear sign of the results that purchasing behavior changes little. “The buying habit is still very strong,” says the marketing professor.
Schüßler: States have an opportunity to link financial injections to changes in markets
“How well or badly you have tried yourself in crisis management is related not only to the acute crisis phase, but also to the before and after phase,” explained Professor Elke Schüßler. It should be clearly seen that in the preparatory phase, things were neglected which should now be compensated as much as possible. “Austria and Germany are doing very well here because confidence in the state and decision makers is strengthened. That is what a crisis is about, ”says Schüßler.
But you can also see that the preparatory plans were in place but were not acted upon. “This certainly has to do with the fact that there was action in the case of previous pandemics or expected pandemics, but the criticism was great after the pandemics did not occur,” emphasized the professor, referring to purchases of protective masks in Austria. during the swine flu era.
There is great potential for change after the crisis in the face of abuses in globalization or, for example, climate change. “But after the crisis, the desire to ‘get back to normal’ is often very strong. Or, of course, it contradicts the possibilities of making the economic system more sustainable.” Schüßler shares the skepticism of the UN climate protectionists, who expect a setback for climate protection, but also emphasized: “The possibilities of doing better later are in the Hand. Every major innovation in history has had a strong status. at your side. States now have the opportunity to link economic aid to certain conditions and therefore demand a rethink. ”
Questions and contact:
Mag. Jürgen Schwarz, Public Relations Manager
JOHANNES KEPLER UNIVERSITY OF LINZ
T +43 732 2468 3019
M +43 664 60 2468 352
juergen.schwarz@ @jku.at.
