>CHALLENGES & DIFFICULTIES WHICH WILL BE FACED BY UNITED STATES AND EURO ZONE

Is it serious, doctor?

We find very worrying the long list of challenges and difficulties which the United States and the euro zone will be faced with in the medium term, and which are more serious after the crisis than before it:

• accelerated deindustrialisation and offshoring, in a global situation of excess production capacity and anomalies in the formation of exchange rates; need to squeeze production costs;

• ongoing deleveraging by the private sector, for reasons on both the credit demand side (decline in financial and property wealth) and on the credit supply side (less securitisation, new prudential rules for banks, higher cost of banks' funds);

• spontaneous distortion of income sharing to the detriment of wageearners, due to continuing high unemployment and a high required return on equity in a situation of moderate growth;

• inexorable rise in commodity prices and in the use of fossil energy, due to the growth model of emerging countries, including China;

• long-term negative effects of excessive public indebtedness: restrictive fiscal policies or crowding-out of corporate investment.

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