COMENIUS PROJECT 2013-2015

CRISIS ? WHAT CRISIS?

An Interview with Dott. Orsatti Roberto e

Dott.ssa Liliana Ragazzoli, from “Banco di Brescia”

1- Is there a financial crisis in Europe?

The financial crisis was officially recognised at the end of 2010 but it started in the United States of America in 2007-2008 with the “Lehman Brothers” bankruptcy.

1- Is there a financial crisis in Europe?

The European Central Bank BCE allocated funds to European countries to avoid default. These countries were Ireland, Portugal, Greece and Italy.

1- Is there a financial crisis in Europe?

At the beginning the crisis was underestimated. The previous long phase of rapid growth brought a lack of balance due to the globalization of financial flows. Many families and enterprises ran into debt and private savings disappeared because of the worldwide financial crisis.The crisis caused the global drying up of liquidity and contraction of credit flows to enterprises and families.

1- Is there a financial crisis in Europe?

The Italian national debt is high and so are the interest payments.The solution is to cut public charges or raise taxes but this means less consumption so an economic slump occurs.There is also a need in Italy to fight tax evasion.

1- Is there a financial crisis in Europe?

In some other countries the impact of the crisis is less evident.The problem is that Europe is not able to have clear thinking or agreement which would affect the redefinition of the financial/economic worldwide system.

2- How does it affect your business?

Money circulation is the bank’s business, so a financial crisis means a banking system crisis. Banks are seen as scapegoats mainly in handling the funds of European Central Bank BCE. Banks had to manage the emergency caused by the crisis. They had to reduce the allocation of money to families and enterprises.

2- How does it affect your business?

The cost of money is high because there is lack of monetary liquidity. Banks give money to ones who deserve it so enterprises are evaluated. It is sometimes difficult to manage bank work.There are different banks: some have financial solidity and can continue to support families and enterprises; others do not have solidity and cannot give money to anyone.

3- What do you do to overcome the crisis?

There is some support for families and firms, for example, a “moratorium” on payments for 12 months to let people find the money to pay debts.

3- What do you do to overcome the crisis?

Unfortunately savings are eroded and if people do not get salaries it creates a big social problem. There are also some funds for the young who need to buy a house. We also need an economic recovery, more work and increased salaries. 

4- How could this crisis be avoided and what would your advice be to the young people of Europe?

Economists did not understand this crisis so neither did we. The American government should have realized that indebtedness was extreme. The monetary policy was too permissive and regulations were too lax.Better politics may have avoided this crisis.

4- How could this crisis be avoided and what would your advice be to the young people of Europe?

In 2003-2004 USA market analysts realized that there were a lot of rising social financial imbalances.In 2005 analysts agreed that all these imbalances could cause severe problems.In 2006 the analysts Raghuram Rajan, Ken Rogoff, Nouriel Roubini and Robert Shiller warned that lots of risks were growing in the financial markets. The Federal Reserve could have increased interest rates to slacken credits.

4- How could this crisis be avoided and what would your advice be to the young people of Europe?

Young Europeans need lots of optimism because only young people can help to get out of this crisis.They have to be open to other countries, to open their horizons, not just to feel sorry for the negative situation, not to let themselves go but they have got to try and snap themselves out of the crisis.

5- Are there many requests for funds at this time?

No there aren’t, because people are afraid of long-term debt.Firms are fearful of investment because they do not know what the future holds.