Today the column of MyZaman is the loyal retranscription of the keynote speeches of the hosts of the annual Corporate conference of one of the biggest and more influent European banks. The names of the bank and of its directors have been hidden (because of confidentiality, but also because it is not very important to know which one of the few continental-sized banks endorses these deeply-rooted European views). Only the name of the public keynote-speaker, the former German minister of foreign affairs Joschka Fischer, is disclosed. Because he is a wise man and a free European spirit and consciousness ; and today freedom and consciousness are key for our immediate Future.


The deputy-CEO of the Corporate Investment Bank


« Mister Fischer says that ‘’the main goal of Ocktoberfest is to get drunk’’. But today we are here in Munich during the Ocktoberfest to talk about the present and the future of European banking, mister Fisher is here to talk about geopolitics, and geopolitics is important in banking. And what it is even more important, is to understand the cultural chages going on »


« The evolution of the Open banking sector is key for the economies, and what is going on in Europe has an impact on banking. Banks will do everything in a way that Europe will continue to write its History : supporting with credits and financing the European economy is vital for the baking industry, and for our economies, too »


The Chief Economist of this leading continental Bank


« The title of my keynote speech is ‘’Navigating the Noise’’. US is probably more vulnerable, and Europe is probably more strong than what people think. Bad politics make bad policies, and bad policies make no growth (nor progress).»


« China is slowing : they do not tell us, they will grow probably 5% this year instead of the 6.5% they declare, but in general the world economy looks ok. The fiscal stimulus that Trump gave beginning 2017 is totally crazy in times of peace and at the end of an economic supercycle (started after the crisis of 2007-08, with the Obama’s administration). US economy under Trump can crash at any moment, or continuing going up. »


« Monetary conditions are tightening, because of US libor and most of all the end of Quantitative Easing in the Euro zone (and the impact of the end of QE is higher than what we say and see). According to my economic model, the probability of a recession in the US within 1Y is 30% and is 85% within 3Y : but unfortunately my model is not telling the truth, cause now there is too much noise in the world economies. »


« The Fed told yesterday (i.e. : the Fed increased its main reference interest rate by 0.25pct on September 26th) that the US rates hiking will continue up to 2020 : probably this is not true, the Fed knows its but tries to stabilize the expectactions of the financial markets, and the agressive trade measures of Trump will impact the US economy well before 2020. »


« Something is cooking down in America, and it is not good. The Purchase Managers Index (PMI) in Europe are slowing down : corporations are reducing their growth plans and investments, cause they are fearing the present economic outlook ».


« Trade measures and the crazy fiscal expansion in the US will make the US dollar stronger. Europe is the biggest trade economy of the world, since ever (while historically the US, the Chinese, the Japanese, are more closed and trade less, if we look history well). So the growth of Europe is very much linked to the global trades. If something happens to the world trade (e.g. the US and China stops trading and close their economies concentrating on internal consumption), the European growth will suffer. Protectionism is bad for economies, but so far and up to date the numbers are ok (I have just bad feelings about these same numbers for a near future) ».


« The problem of Italy is not its deficit, but the spending side (beyond any form of control and ineffective) and most of all the fact that Italians pay too much taxes, a fact that depress the economy ».


Joschka Fischer, German green party, political activist, former Foreign Minister of his country (1999-2005) and one of the most inspired European citizens

(free transcription of its keynote speech)


My dear E . (the Chief Economist) , stability is not an element of Trump politcs. So, events in Trump’s era happens : as an economist, expect and try to anticipate them, my friend.


It is obvious that the West is in a crisis initiated with Trump and the Brexit, and that the East part of the world goes better. We had the chance that France did not become Lepeniste (Lepen lost precisely because she has nothing to say about Europe, which is our common home, now), so the crisis of the Western world is less worst than it could have been. We need to sustain the West, now, because West is suffering.


The West without the US and UK is impossible, because the West is Churchill and Roosvelt, and their heritage. But how to figure it out, now ?


The decision of the UK to go back in History, to XIX century, is maybe OK « economically » speaking. But it is also ideological : UK wants to come back to a golden-age. Maybe. This does not work for Europe (and not sure it will work for the UK neither).


The world order created by the US after WW2 is now somehow abandoned with Trump : this is an error, but the problem is that the American electorate seems it does not want this world order anymore (after Vietnam and most of all Irak). The Pax Americana is finished : who will step in the US shoes now ? Today China, Russia, Japan nor Europe can assume this role. What will happen so ?


It is too early for China to go into a confrontation with the US. China is not ready, ideologically, to face the US. The result could be, in the end, a cooperation between the US and China. This cannot be excluded.


The guarantee of Free Trade is an element of the Past, not of the Future. Europe must deal with this : the world has changed and we won’t be back. My view of Europe is rather grim, but Europe has survived to many things since 1945. The key point for me today is Technology. If we disconnect from the digital economy and from the technological edge, we miss the biggest challange for our continent and other nations will take care of the European nation. The Future of Europe is to preserve its-own position as a technological hedge, and this is not given : today the Sylicon Valley and Shentzen in China attract too much our researchers and best talents.


I do not see Italy out of Europe. There is a lot of noise, yes, E., but things will arrange : do Italians want self-distruction ?


Macron will be one of the key persons for Europe. October 14th is the Bavarian elections : this is very important. Angela Merkel is on the way out (and maybe she should make the decision by herself : she won’t be elected for a fifth term, cause it never happened in Germany). Germany is moving then into the post Merkel era, a probably towards a major change into its parties system. Bavaria in October could be another crisis point, and a major transformation point for the German party system.


Germany is not just a Catholic or just a Protestan country : it is both, and it makes things much different to be understood by other Europeans. We must be a bit more lucid, now. Take European banks : from a global point of view, and compared to US banks, Japanese banks of Chinese banks, we are not very impressive. We must do more. Take the European defense : if we do not have Hard-power, the bulk of Soft power and money we have are vain. Chinese are already in Greece (they own the Pireus), in the Balkans, and invest all over Europe : Europe must deal with this and maybe answer with a single voice.


Concerning Brexit, evenif it is not good for the West in general, we must be lucid, too : there is life after divorce. But we do not have to forget that there is a War on our continent (in Eastern Ukraine). European must have a true confrontation with Russians. The relationship between Europe and Turkey is fundamental, too. Up to 2011, Turkey was a model for every one (economically, socially and for the progress made even in the rule of law : they abolished capital punishment, for example ; that means something for a country like Turkey). But after the arab springs, unfortunately, and that is a pity, Turkey has gone. We must face now with this reality.


To resume and conclude, the major challange for Europe today is Technology and Innovation : we need speed, and size. US have both. Chinese has size, and they are older than us (they were an Empire well before the Romans). Let’s invest in our talents and young people. Let’s free them. Let’s inspire them (that is the only way).


Munich, Germany

September 29th, 2018