Global insolvency index (right axis, descending values)
0 0 0 0 0 0 0 0 0 0 1 1 1 132109876543210
Sources:national statistics, EulerHermes calculation and forecasts
40 30 20 10 0 -10 -20
fromcataclysmic, it nevertheless remains veryweak.We are now entering the sixth consecutive year of crisis, a far shorter cycle than for theMayan calendar (5125 years!) but every bit asworrisome in terms of impact on companies’ balance sheets. And no, theworst is not behind us - or ahead of us, for thatmatter.We have actually been at the bottomfor awhile now, a little too long in fact. Among the risks to monitor in 2013we obviously have inmind the extended recession in the eurozone aswell as the number of company failures,which is soaring.Will the austerity plans finally help restore public finances and competit- iveness? It is possible, but thesemeasuresmust be given time towork. The eurozone already lost one percentage point of growth in 2012 because of institutional flaws. The consolidation is a long time coming, and the industrial base is alreadyweakened. This crisis is moreDarwinian thanMayan! In 2013, there is also reason to be concerned about the resilience of emerging countries,which have already experienced setbacks due to faltering demand fromEurope and theUnited States. The Asia bloc in particularwill bemarked by production overcapacity,whichwillmake itmore difficult to solve purely domestic problems. Also, the highly expansionarymonetary policy raises the problemof inflation in themediumterm, beyond the issues of financial stress and transmission of liquidity in the short term. This is the case in theUnited States,where the fear of the fiscal cliff has already put a damper on business investment. Lastly,with growing protectionism, the political riskswill also become important factors in 2013. This inward-looking attitudewill have an evenmore serious impact on business-to-business trade. “Anne,ma soeur Anne, ne vois-tu rien venir* ?” Perhaps a slight upswing in growth at the end of 2013? This is our scenario.Withmore encouraging figures for 2014,we believe the crisiswill become regionalized, paving theway for new forces atwork.While Europe continues to "try, try and try again", the rest of theworld, beyond the BRICS, is evolving fast, oftenwithout a revolution, and this could open the door for newgrowth drivers. But is crucial to continue to invest in R&D, innovation and human capital, which are items in a balance sheet that are too often seen as fixed costs - andwhich are the first to be axed._Ludovic Subran * Charles Perrault’s tales : ‘‘Contes demamère l’Oye’’