The idea was to ensure that the banks have no loss

On the occasion of the publication of a collective work by the CEPII () and a seminar on the issues of the global economy, the Economist Michel Aglietta draws the lessons of the crisis for China and Europe.

You explain in the book published by CEPII that China entered a new phase of growth, more inward and less dependent on Western countries What is prompting the to make this shift

This is a path that she would have borrowed anyway because it is registered in the 12th five year plan. But the experience and the crisis forced it to speed up the transition. In recent years, quantitative, heavy growth capital, has created some distortions in the income distribution and produced adverse effects on the environment. It did not develop enough inland. The crisis, for its part, deprived it of a major medium: sustainable growth in Western countries. This conquest of the internal market has already begun: regions that grow as quickly as possible since 2009 are no longer the regions situated on the East Coast. In addition, there are drying of the workforce from 14-25 years long was the mass of wrong migrants to thank you and labour market is also more flexible: there will be increases in wages that the Government has decided to strengthen by application of the law of labour introduced in 2008 and supported a corporatist unionism of company.

Will what effect this reconquest of the internal market on the world economy

It is a medium-term process. Fifteen to twenty years from now, 300 million people will move from the rural to the urban world. This requires considerable infrastructure investments. In its external relations, even if it will be apparent in part of its traditional customers, China will need a security of supply of raw materials and it will develop its exports to other emerging. The result is already by a strengthening of Asian integration in trade and financial relations, and denser relations between China and other emerging, Latin America and Africa. After the fall of the USSR, the projection of Western capitalism was seen around the world. Today it is globalization more completed with trade and financial flows in all directions, including outside the West. It is an interesting phenomenon.

There is new pressures from the United States for an appreciation of the yuan. Can this permanently reduce the trade imbalances that have developed over the past ten years

In any case. We have seen between 2005 and 2008, while the yuan was very much appreciated by 20 in real effective terms and that the dollar had weakened by the same amount: Chinese trade surpluses have not declined and the US deficit widened. The real appreciation of the yuan will be phased out by the increase in domestic prices.

Will the g-20 be an opportunity to initiate a reform of the international monetary system

The Europeans, starting with the France, will seek to advance this issue. China will not take any commitment without minimum consideration for a power increase in the IMF and the abolition of the US veto. This is part of the reform of the governance of the Fund. There will be a new homeopathic increase in quotas, but if it really wants to move towards a peaceful coexistence of competing currencies, should organize with the formation of several integrated regional economic zones, each zone is not a full monetary union, but with the addition of monetary cooperation mechanisms. Chiang Mai Asian agreements constitute an embryo of such an orientation for Asia.

Do you think that the risk of failure of European States remains

The risk exists that the countries that have adopted remedies of horse, the Ireland, the Spain and Greece especially, occur in 2011 or beyond in insolvency situation. It would be the case if Europe would fall into recession or moved in deflation. This is why I think that should have been that Europe provides the means to manage a partial bankruptcy of a State in an orderly manner. It would have been a good idea to gather the creditors around the table, determine the amount of abandoned debt, reschedule the other party, and issue securities guaranteed by the European Union so that the country can return quickly to the capital market. We know, as of October 2009, the State of Greek finances. But it is not too late: Europeans must put in place a contingent plan in the event of new shocks to weaken already fragile European countries.

Would you say that the Greek crisis management was made for the benefit of the banks

No doubt. The idea was to ensure that the banks have no loss.

Read the interview full on lesechos.fr