The Son of Finance of the Great Age

  Chapter 734 Trip to Europe (4)

   "Hello, Mr. President!"

  Zhong Shi said to Visco with a smile on his face.

  Ignazio Visco, the current deputy governor of the Central Bank of Italy, is one of the most favorable candidates for the next governor. He looks like he is in his fifties, with a ruddy complexion and a full complexion. He wears a pair of rimless glasses, revealing a refined aura. This is a typical image of an intellectual.

   "Welcome, Mr. Zhong!"

  Visco reached out his hand equally enthusiastically and held Zhong Shi tightly, "It is my honor to be able to talk about monetary policy with the famous financier Mr. Zhong."

  Here is the Palazzo Koch in Rome, the headquarters of the Bank of Italy. After finishing their inspection of Greece, Zhong Shi and others flew non-stop to Rome, the capital of Italy, where they will meet with the Vice President of the Bank of Italy, Ignazio Visco, according to the established agenda.

  Italy, located in the Apennine Peninsula in southern Europe. With a population of about 60 million and a land area of ​​300,000 square kilometers, it is the fifth most populous country in Europe. Because of its beautiful natural scenery and a large number of human cultural heritage, Italy is recognized as the "beautiful country".

   In terms of economy, the three major state-owned consortia, Yili, Eni, and Efem, control the lifeline of the country's industrial economy, accounting for more than 30% of the country's total industrial output value. Most of the remaining 70% of the output value is created by small and medium-sized enterprises, so it is also known as the "Kingdom of Small and Medium-sized Enterprises". Agriculture is mainly dominated by household micro-enterprises, whose output value is only about 15% of the national GDP. In terms of service industry, Italy's tourism industry is extremely developed because of its pleasant climate and rich cultural heritage. At present, the annual income can reach about 6% of GDP.

  GDP figures, in 2008, Italy's nominal GDP reached 2.4 trillion US dollars, with a growth rate of 8.8%. It is the third economic power in the euro zone, second only to Germany and France.

  But according to the latest data, Italy’s GDP this year is very likely to experience negative growth, and the statistics for the first three quarters are extremely pessimistic.

   "Mr. Zhong is here this time, is he planning to invest in our country, or is there any other purpose?"

After the two sides exchanged pleasantries, Ignazio Visco asked straight to the point, "According to my understanding, Tianyu Fund is a pure investment fund. Although it has invested in various parts of the world, it is not The main holding, or not intervening in management, so I am very confused about the purpose of your visit this time."

  In his words, there was a slight threat. In fact, after Soros defeated the Bank of England, the entire hedge fund industry began to be wary of central banks. Although the two sides will not quarrel to the point of tearing their faces, some countries have always been wary of hedge fund managers.

   Of course, things are not absolute. For example, in 1998, the Prime Minister of South Korea invited Soros to visit Korea. In 2001, the Prime Minister of China also discussed with Soros. For such top-level business elites, some governments that need them will still maintain good relations, and fund managers are also willing to maintain this kind of close interaction with high-level governments.

   It’s just that for Zhong Shi, his previous investment focus was on Asia and North America, and he had almost no contact with high-level European governments. Therefore, it is inevitable for the other party to be vigilant when visiting rashly under such circumstances.

  Although he was vigilant, Visco didn't think that Zhongshi could bring any harm to Italy deep in his heart. After all, the other party is just a hedge fund with a scale of hundreds of billions of dollars.

   "No, no, no!"

  Zhong Shi naturally denied it, "Mr. President, in fact, I am here this time to exchange opinions with you on the current economic situation in Italy. If you are interested, we can even talk about the world economy."

"Very happy to!"

As soon as he heard the intention of the other party, Visco immediately showed a smile. To him, what the other party's intention is is dispensable, but if he can talk about the economy with such a person, it will definitely be a benefit. things.

   This does not mean that Visco and others do not have their own opinions, but the more they absorb the opinions of all parties, the more they can grasp the laws of things. In this sense, Zhongshi is like a macroeconomic consultant, and he is such a high-level consultant that Visco will naturally not miss it.

"First of all, according to public data, Italy's GDP was extremely pessimistic in the first three quarters. At present, the most optimistic predictions by major institutions for Italy's economic growth this year are only 0%, that is, no growth. , I believe that Mr. Visco is well aware of this, right?"

Zhong Shi said unceremoniously, "However, according to my own estimation, I am afraid that even the most pessimistic market forecast has far overestimated the extent of the Italian economy's recession. My personal tendency is that the Italian economy may experience a decline of more than 5% this year. decline, which is very likely to happen.”

"From the perspective of the external national environment, because France and Germany are the economic centers of the euro zone, compared with their GDP data, Italy's economic data is quite bad. So if Italy is in a serious downturn, it will further lose its market share. The right to speak in the entire euro zone is quite detrimental to the whole of Italy."

"In the internal environment, the debt ratio of the Italian government is so high that it is astonishingly simple. That is, compared with GDP, the debt of the entire country exceeds 100%, which is only lower than Japan and the United States. But there is an important difference , that is to say, the above two countries have independent currency issuance rights, and at the worst time they can repay their debts by issuing currency indiscriminately. For Italy, this possibility does not exist, so in the case of high debt , Italy's economic prospects are dire."

After Zhong Shi spoke eloquently for a while, he picked up the water glass and took a big sip before continuing, "The above are my views on the Italian local economy. On the other hand, due to the economic crisis, in the next three to five years, It is impossible for the entire world economy to recover. Maybe this time needs to be corrected, but I believe you are also pessimistic about the overall economic outlook, so in this case, I would like to know what kind of approach the Italian government and central bank plan to take ideas to deal with the current predicament?"

   "First of all, I have to admit that everything you said is true!"

Visco's face was quite ugly. He pondered for a while before he said slowly, "The high-level government and we both have a clear understanding of this. But because it is impossible to adopt large-scale fiscal policies to promote economic growth, We lost monetary policy again, so we had to do what we needed to do, starting with spending cuts and tax rebates."

"In addition, in terms of fighting corruption and bureaucracy, the new government will also make up its mind to rectify the bureaucracy. There is also the debt problem you mentioned. I don't know if Mr. Zhong has noticed it. In terms of debt, we have about 6% of the debt Refinancing is carried out, which will be paid out as interest on the total debt, in order to maintain this part of the debt from default. When appropriate, we can also do this by privatizing nationalized assets and selling state-owned assets Debt repayment. So in our view, the debt aspect is not the most important issue.”

"Oh?"

  Zhong Shi was slightly taken aback, "For the Italian government, which issue is the top priority?"

   "Unemployment rate!"

Visco's face was a little solemn, "Although it is in line with the economic recovery, the unemployment rate for teenagers between the ages of 18 and 24 has reached an astonishing 30%. This part of the young and middle-aged labor force has not entered the labor market, and various Social issues require the use of public security resources. From this point of view, our government spending is not so easy to drop. In addition, if these people do not enter the job market, they will not be able to form a consumer group and will not have any effect on promoting domestic demand. I believe You are also very clear that this group is the main force of consumption, if this situation continues, the consequences will be disastrous."

"In addition, if the employment problem of this group of people is not properly resolved, there will be great uncertainty for the entire political situation. When the government handles economic problems unfavorably, this group will ask the current government to step down , to re-elect a government they think is capable. In this case, economic policies cannot be continued in an orderly manner, and each government that comes to power will mess around, and the uncertainty brought about by the policy will also increase. Chaos all over Italy."

   "That's a real problem!"

  Zhong Shi tilted his head and thought for a while, and thought what Visco said was very reasonable, "So how does the Italian government deal with this part of the problem?"

"As far as the current situation is concerned, we think there are two ways to solve this problem. But it is impossible to achieve results in a short time. It may take three to five years, or it may take longer, but no matter what, our The economy is always going to get better, isn't it?"

Speaking of this, Visco finally showed a smile, "On the one hand, it is natural to expand the scope of exports. In the past, our largest trading partners were countries in the Eurozone, but under the overall sluggish demand, we intend to export Italian companies Push it further, including emerging markets like Huaxia. On the other hand, in terms of internal factors, we will introduce measures such as supporting enterprises and rewarding employment, and implementing specific policies to implement employment for young and middle-aged people, so that the demand for labor will increase. It will be further extended, which will also help to a certain extent with the current reduction in government spending. You also know that once they have a job, there is no need to receive government assistance."

   "This is indeed a good idea!"

  Although it is a conventional way of handling it, if it can be implemented in this way, it will be a feat of the Italian government. In fact, in many cases, if you choose to increase taxes because of debt problems, the gains will not be worth the loss, because tax increases will definitely weaken the enthusiasm for investment and production, and in this case, the tax sources that can be received will be reduced.

  The Laffer curve illustrates this point.

  "Since you mentioned politics just now, I would like to ask, how much harm will the policy uncertainty brought about by politics have on the entire Italian economy?"

   "The current prime minister is the chairman of AC Milan, Mr. Berlusconi, right?" Zhong Shi asked tentatively, "This is a very famous guy!"

   "I am no longer the chairman of the club!"

A look of disdain appeared on Visco's face, "It's just a media tycoon. At least in my opinion, his ability is really mediocre. I personally think that during his tenure, Italy's economy will not get any improvement. "

"how can that be?"

  Zhong Shi exclaimed, "At least with an aide like you, he can't do worse economically!"

   "Do you think I'm the one who gets reused?"

Even in the face of outsiders like Zhong Shi, Visco couldn't hide his disappointment, and kept complaining, "The people around him are all sycophants, and there are not many real talents. Some time ago , Those guys are planning to reduce debts by raising taxes, which is really unbelievable. If it weren't for the unanimous opposition of the congressmen, the whole thing would have come true. Damn, these people are too There is a lack of common sense.”

   “Serious political risk!”

  Zhong Shi silently added one in his heart.

   Thank you book friend Shihuangtian for voting for the monthly ticket! I don’t know what happened at the end of the year. Although it has improved compared to last month, it’s a pity that the situation is still not optimistic. The author will continue to work hard and hope that more book friends will pay attention to and support this book~

  (end of this chapter)