The architecture of international economic relations is destroyed by Donald Trumpaccording to statements by the President of the National Bank and the Hellenic Bank Association, Mr. Gika Chardouvelias part of his participation in the Delphi Economic Forum.
In a discussion on “Duties, Inflation and Disorder” on the latest developments on the global economy, as well as the prospects for the wake of the recent imposition of US duties and their negative impacts on markets and economies. In his presentation, Mr Chardouvelis stressed that Trump’s policy is destroying the architecture of international economic relations, which the United States has thoroughly helped to create it for the last 80 years.
At the same time, he pointed out that, “if the new duty policy is fixed, it takes us back to the rates of the 1930s. Then the increase in the rate of duties from their already high level by President Herbert Hoover has led to a further deterioration of the Great Depression. Today, the increase in duty rate starts from a lower base (about 2%) but is at least 3 times higher, and even with an American economy 3 times more open to foreign trade. And retaliation has already started on the side of China. Consequently, the likelihood of the global economy in a stagnation orbit has increased.
However, to the question of whether we are on the verge of a new large world recession, similar to that of the 1930s, Mr Chardouvelis responded negatively. He emphasized that, no matter how harmful the duty war will evolve, since policymakers around the world have been taught by the mistakes of the past, he believes they will not repeat them.
With international trade shrinking, the impact on the Greek economy is expected to be negative, but significantly smaller than the eurozone average. Immediate effects are expected to be limited due to the relatively small export export of the Greek economy to American (4% of our exports). However, the weakening of the growth of the eurozone, the main commercial partner of our country, could be a two-way of 0.2-0.3 percentage points a year from the rate of GDP growth in the two-year 2025-2026.
Mrs Chardouvelis said that for Europe the response to Trump duties is contained in policies recently proposed by Mr Draghi and Letta.