Today in Europe even if growth returns of 1

After the financial crisis, then the economic crisis, opens the real crisis: the political crisis. It began in Iceland, Ireland, is in Greece and in Massachusetts. She puts Governments between two fires, payable by the States financial markets, and public opinion, which is asked now to "pay" for the pots broken by those same markets. The outcome of this political crisis is today completely uncertain.

To avoid the scenario of 1929, the great depression, Governments have adopted recovery plans which have cut deficits (from 8-10 of the GDP). At the same time, authorities rescued banks by injecting capital, buying "rotten" assets and guaranteeing deposits, for totals by higher countries, according to the "Financial Times": 182 billion in France, 669 in Germany, 1.481(2) billion in Britain, 2.683 billion in the United States. This policy has succeeded, as the G20, IMF, the OECD noted. only a few American Republican elected in doubt again. But will come the time to step back, to install the rigour and the accumulated debts.

The first question is "when to begin The answer is: not yet now. But the markets already agitated, it is time to announce the colour and to say, clearly, what are "exit strategies" which will be put in place from... say 2011.

What will be the extent of the "adjustments" Considerable. Because the crisis comes at a time where the ageing had already put the public finances at risk in developed countries. The two Add.

What solutions There are three. The first is growth. After war, it had enabled the United States of a debt that was then, around 300 per cent of GDP. In contrast, in France or in Britain this remedy had been sufficient. Today in Europe, even if growth returns of 1.5 (this year) to 3 the year, it can not only reduce the debt in the medium term without additional adjustments according to calculations by Laurence Boone (Barclays Capital). And then the growth should be soft during the Decade in the United States and in Europe.

Two: inflation. The debate divides economists. For half the case is heard: aid to banks, which amounts to issuing money, will lead to hyperinflation in the 1970s, and it is the easiest way not to repay creditors. For a half, this schema is impossible as long as the unemployment affects 10 of the population and as long as China weighed on prices, which will last.

Rest therefore the three solution: "adjustment", cuts in public spending or tax increases. There is the political danger. In Greece, a majority understands that the country must accept the harshness, but opponents argue that: "when even!" These are golden boys who have failed and who put unemployed and this is now that they require to reduce social protection. Everything for their bonus! . It will be on 10 February, a large demonstration in Athens, the echo of this speech. But measure that it will become very popular for a clear reason: it just sounds. Citizens, step only in Greece, feel that Governments have paid thousands of billion to banks "guilty" (combining banks and stimulus aid) and that now show them the note!

In reality, States had deficits before the crisis and to a (lesser) rigour was inevitable. Markets can also argue that they represent pension funds, i.e. the pensions of the citizens! A crisis of generation is exposed here. But, between the requirements of the markets and the wrath of public opinion, Governments will have to navigate very tight. The financial sector, in particular the Bank, never leaves not free. It is present. That the axe of the rigour will be felt, the popular complaint will compel politicians to undergo a painful "contre-ajustement" to the banks. A reading of the vote in Massachusetts, Barack Obama began with the Volker plan. The banking lobby can block it, but there are others, no doubt more hard. The political crisis can only worsen.