The Rafael del Pino Foundation hosted the Keynote Lecture by Juergen B. Donges entitled "Facing a tough economic recovery, with risks". Donges entitled "Facing a tough economic recovery, with risks", as part of the Master Lecture Series "What will our societies be like after the crisis?", on 26 November 2009.
Professor Donges said: "In the labour market, the worst is yet to come. Next year, in all EU countries, in the US and in Japan, the unemployment rate is going to rise. Also in Spain. The ultra-expansionary macroeconomic policies of the last few months have an expiry date, which will be more or less within the next year, and then these stimuli will disappear. And we don't know if until then we have enough strength of our own in the economy to pull it through.
On the need to anticipate exit strategies, Juergen B. Donges said that "It is absolutely necessary to talk about these strategies now. Donges said that "It is absolutely necessary to talk about these strategies now. Neither the current monetary policy, with interest rates at almost zero, nor the fiscal policy, with public deficits that have gotten out of hand, are sustainable over time. This is always a source of nervousness for the markets, and it is therefore important to develop exit policies now, to recompose what has been done so far. This does not mean that interest rates must be raised tomorrow, or that public deficits must be eliminated from one year to the next, but it does mean sending a clear message to the markets that we want to return to normality in this area as well. And that means saying now how the abundance of liquidity is going to be reduced [...] and governments have to present clear programmes of budgetary consolidation four to five years ahead, and say what they want to do, where they are going to cut spending, how they are going to recompose it, what they are going to do with taxes. All this has to be done now".