Bloomberg TV 20200709

Reproduced with the kind authorization of Bloomberg TV.

BNP Paribas Chief Economist William de Vijlder discusses the pressures facing the next Eurogroup President. Interview by Anna Edwards and Matt Miller on “Bloomberg Markets: European Open.” July 09, 2020.

Matt Miller, presenter: It will be interesting to see who the next Eurogroup president is, William. What do you think is going to be – whoever it is – what do you think is going to be her most important job?

WDV: Well, at the risk of sounding too negative or even paranoid, I think the key question is what do we do next time. Next time means when you have another recession coming. In so many years you have an economic recession, what is the reality today, the ECB is at zero [loan rebound] where the huge balance sheet keeps on growing and we have budget deficits having gone up significantly. Debt/GDP up 20 percentage points of GDP. So what do you do when in 5 or 10 years’ time there’s another recession? And I think the way that fiscal policy is going to be handled at the Eurozone level is going to be the big one to agree upon. At both [days] do we want countries to scale back the budget deficits and how do we react next time around.