MercoPress. South Atlantic News Agency

British economist blames financial sector for current optimistic forecasts

Behind the idea that the current economic crisis will be over by 2010 are the interests of the financial sector that are trying their most to avoid a greater regulation of markets claims British Professor Robert Wade.

The global economy will not recover until at least 2011, “and not in 2010 as the optimists are insisting”, said the academic from the London School of Economics in an interview with the Spanish media.

Professor Wade, member of the Economists Forum from the Financial Times (which brings together the fifty most prestigious and influential economists of the world) said he was not convinced about the forecasts from the European Central Bank and the US Federal Reserve which anticipate the end of the crisis in 2010.

“I believe” that behind those forecasts is the influence of the financial sector that “wants to tell the people that recovery in imminent and most probably all will be back as before, simply because they reject any significant change in regulations, and any possible idea of restriction”, said Professor Wade.

“They want that the future of the finance sector should be the same as in the past and they will to the impossible to ensure that”, he added.

“I favour a change in the Anglo-American way of interpreting capitalism, directed more towards the French concept which is confronting the crisis quite well. But I’m pessimistic: the financial sector does not want the same”.

Wade added that there is “a range of data suggesting the crisis is more serious and will be longer than what many are affirming”.

The economist said that to start with “there will be no growth in Japan, Europe or United States until 2011”, and looking back experience teaches that for the next twenty years growth will be at a far more inferior rate to that registered in the last two decades, particularly “because energy costs will remain dearer”.

To arrive to these conclusions Professor Wade analyzed the evolution of the five crisis occurred in western countries with similar characteristics to the current downturn with the collapse of the real estate and financial markets followed by the fall of production.

“A long time will elapse before we reach the level previous to the crisis”, underlined Professor Wade.