 So, I think I was checking the mic, it functions admirably well, apparently, so we will start our panel. We are privileged with a, I have to say, a very, very impressive panel on this issue of the major mid-term, long-term issues for the global economy, and it is my pleasure to introduce the members of this panel. The first on my left would be Gabrielle Felbenmaier, director of the Austrian Institute of Economic Research, the WIFO, and professor at Vienna University. He is also, he was also the head of the IFO Center for International Economics in Munich, the very famous IFO Institute, and he was also president of the Kiel Institute of the World Economy, so an extraordinary career, if I may, in chairing a very, very important institution. We will then hear what Sébastien Jean has to say. He is senior associate of the IFRI, and professor of economics in Paris at the Conservatoire national des arts et métiers, and he holds the chair Jean-Baptiste Sé, which is a very, very good mentor, if I may, on the industrial economy. He's also a member of many, many councils, and he has previously been director of the CEPI in Paris. So thank you, Sébastien, for coming, we are very honored. John is an old friend, I have to say, I have to declare, John is a friend. Senior fellow of the Foreign Policy Institute at John Hopkins, he was first deputy managing director in the IMF, was also acting managing director of the IMF, and he was, he had a very important position in the private sector. So again, John, you're a globetrotter. We see you in Shanghai, in Seoul, everywhere in the world, in Delhi, and you were kind enough to come. Thank you very, very much indeed. And we have Marcus Nolan with us, so thank you, Marcus, very much, executive vice president, director of studies at the Peterson Institute for International Economics, and you have been senior economist at the Council of Economic Advisers in the executive office of the president of the United States, and you held research or held research and teaching position in many universities, top, not universities including Yale and John Hopkins. So here we are, blessed with your presence, and I think we could say that we are prolonging in the economic sphere what Thierry de Montréal said a moment ago at the level of the globe and on all dimension, if I may, including technological dimension, political dimension, social dimension. We will be more modest, we will perhaps try to elucidate what are your main messages as regards precisely the main issues for the global economy in the present time. I would certainly say that there are many, many numerous dimensions to the questions which are asked explicitly in our panel. I will only list those questions, but as I said, each of us has messages, will concentrate on some message, and it is what is important taking into account their experience and what they have done in the world until now. So I would only mention technology, as said, Thierry, is a major, major driving force and we are experiencing with artificial intelligence something which is particularly striking, but it's not near start, it's only a start. Science and technology are progressing on a very large front. I will note climate change, don't insist, green transition, we are on a single spaceship which is planet Earth and we recognize that we have to take care of all of us without any exception. And if there is a domain where it is absolutely clear that all countries concerned have to take care, it is certainly taking care of the single spaceship in which we are. Another point would be, of course, reflecting on global trade, what happens in global trade, what happens in the hedging of the global, long global value chain. The change of attitude with the global change is very striking as a lot of, I would say, counterproductive consequences, both as regards the growth on the planet and as regards also the push for inflation of the planet if we are not optimizing the global value chain as we did before, but clearly this is a very important trend. We have, of course, the fight against inequalities which was also mentioned by Thierry. I think it is something which has generalized the world over, advanced economy, emerging economies, all countries and economies on the planet have this threat which is the looming inequalities. And, of course, I will say a word on inflation which is one of the big, big challenges that we have today. On that, I would only say that I am reasonably confident that the central banks will regain control when time comes. I take it that in the year 25, we will probably have inflation, core inflation say in order not to be too depending on the volatility of some prices, but core inflation around 2% in the medium term, which is the single goal, the single definition of price stability that we presently have the world over. It came out of the crisis of Lehman that, again, Thierry mentioned and I have to say one of the major consequences of the Lehman crisis is that all major central banks that are members of the basket of the SDR whose the currencies are part of the basket of the SDR, so namely the U.S., Europe, Japan and the U.K. have the same definition of price stability. I consider that this is something which is extremely important, under assessed, under estimate by, I would say, academia in general, unfortunately because, again, it's one of the de facto transformation of the international monetary system that should be analyzed and studied much more. That being said, I don't want to take much of the time and I turn to my neighbor. What would you say? How would you send your messages? I know that you have slides and I thank you for that. Good morning, ladies and gentlemen, thank you for the introduction, Thierry de Montbrial for setting this up, it's always a pleasure to be here, an event that I'm looking forward the whole year. My privileged honor this morning is to start the session off and I'll do so with a number of slides. First of all, the state of the world economy summarized with a very Eurocentric view here for economists, the Eurozone, the United States, the U.K. and China and what we see here is a state of fragility. We see that those bars go up and go down, the Eurozone is not growing, these are quarter on quarter growth rates, the third quarter is just in flash estimates, so quite fresh, the Eurozone is at the brink of a recession. The United States are surprising us with relatively high growth rates, quarter on quarter in the third quarter 2023, the analyzed growth rate would be almost 5%. This is a lot, I'm not sure what you say, but in those times where we need to cool down our economists to get rid of inflation, this looks red hot too much and unsustainable. And China, the engine of growth for so many years is not growing steadily, it's up and down and one of the major impressions that this slide gives to me is how similar the Chinese and the American experience look like if you look at those bars. Even the United Kingdom here looking very much like the Eurozone. The world is such growing with a rate of about 3% in this year, next year, a little bit more, but certainly below the levels that we have seen over the last years. Now that is not surprising given the shocks that we have been under and I would say what we should take away from that is not only divergences across the Atlantic and across China and Europe, but a relative lack of collapse, because resilience is what we should see here. Even for the Eurozone, the feared recession, if it comes, will be a mild one and we're not facing big disaster here. The next year, some improvement in the Eurozone in our estimates, some improvement in the United Kingdom, decline in the United States and the shift side was in China. The big issue for us economists over the last two years or so of course has been inflation. The good news is that headline inflation is coming down on the right-hand side. You see the United States on the left-hand side, the Eurozone in both is coming down. Core inflation is very much the same now in those two areas, surprisingly, something like 4.2, 4.1%, but what you also see is that the Eurozone has a larger trajectory to run through. We have been at higher rates than the Eurozone. And what worries me here is that the 2% target is still quite far away from us. If you look at the green, the green pass in this picture, there's a services inflation and you see it's very high, both still in the United States and also in the Eurozone. The services inflation of course reflects wage growth more than all the other categories. So I think we must say the job's not yet done. The central bankers are gaining back control. That is true, but I fear that we're really in a situation higher for longer as the professionals say and the fight against inflation will be finding the world economy for more than the next one or two years. My fear is that the strong increase in interest rates will feed into financial risks and we have not seen everything yet. So on top of all the EU economic struggles that we're facing, the climate disaster financial risks I think are high. The rates will be higher for longer, I've said so, but we know that monetary policy comes with a lag and the lag can be substantial and my fear is that a large share of what monetary policy will achieve is not yet visible in the data. We see that fiscal policy needs to become sustainable again. That's true in the Eurozone, but it's very much true in the United States and that too will put pressure on growth and on the financial markets. Quantitative tightening has not really fully started and that will also affect interest rates, the long-run interest rates and the growth perspectives. Only 20% according to some estimates of the total impact of monetary policy tightening is yet in the data, so more to come. And what I fear is that the financial crisis that we have seen showing its face earlier this year is not yet over, somewhere all those fixed income assets must be that have come under pressure over the last years with the high interest rates and we only need a big shock that forces insurances, for example, to liquidate their holdings to see more financial stress in the system. So I'm a bit fearful on this side and I'm also a bit fearful about the Eurozone. Inflation differences across the zone are huge in the October inflation rates. The difference between Slovakia and Belgium is something like 950 basis points. It's enormous and something that worries me quite a bit. We are far away from an optimal monetary area in Europe. This should not be possible if we were really having an integrated single market and the interest rates spread across the Eurozone is up. Look at Italy with almost 150% of debt over GDP and the interest payments more than doubling. That puts stress on the system. Now if I may look at the international arena, what we see is that the boom in use of economic sanctions is going on. This is the translation, if you like, in economics what we see in the political world war by other means. The political science colleagues say political conflict that's fought out with economic means. The trend's not good. This is data from the global sanctioned database that I'm putting together with US colleagues at the exponential growth. That is certainly something that's weighing on the gross perspectives of the world economy and shows that the political risks are of course translating into economic risks because sanctions mean disruption of global value chains, mean decoupling at least at the bilateral level. And so that's what we see here in terms of globalization. That's my preferred measure of globalization is just taking a quantity index of international goods traded divided by quantity index of industrial production. So we're hopefully comparing here apples with apples and not bananas. And what we see here is resilience on the one hand, the world has not declobalized but the hyper-clobalization here in blue has stopped and it had stopped like 15 years ago. But what we do see is at the newest data that the world economy is slowing down, a significant decline in this measure. So trades falling faster than industrial production, the world's trade organizations, trade reports are relatively alarmists, not the latest version of it. And I think what we can say is that the decoupling that's happening, for example, at the bilateral level between the United States and China is also eating into the aggregate data. Trade diversion can only go somewhere to mitigate the bilateral effects of less trade, for example, across the Pacific. And then something I would like to bring our attention to is the enlargement of the BRICS group, the two, six more members. I think this is significant, it's under discussed as far as I can say, there are implications on the world financial system as the BRICS have their own bank, for example, setting up more autonomous currency systems. And the enlargement of course involves this country here, the United Arab Emirates. And so I thought it's important to bring it up. In terms of numbers, share of the BRICS plus six in global GDP or in global population, this enlargement is not making a big change, but what it does is it brings in countries that have been outside of the inner circle of policymaking, like Iran, for example, into the BRICS. And I believe that is a challenge for the world order as we've seen it. The hope is that this does not lead to more polarization, but certainly this event tells us something about the situation that we're in, in the world economy and we should take note of this. Here I'll stop. Jean-Claude, thank you for having me again. Thank you very much, Gabriel. You stick to the concept, which is give messages, short, concise messages. Thank you very much indeed. On the inflation, I will only say I share entirely the views. That being said, I will strike myself that core inflation on both sides of the Atlantic is now exactly the same figure, which says something and gives credibility to the fact that they have the same goal, they have the same definition of price stability, which is reassuring, all taken into account even if, as you said very wisely, the challenges are still there, of course. So thank you very much. Can I turn to Sébastien? Thank you, Jean-Claude. Good morning, ladies and gentlemen. Yes, I'd like to share a few thoughts about the way the world economy interacts with world politics somehow. My starting point would be to observe that what makes probably the present situation quite unique is the intensification of grid power competition in a context of close economic and financial interdependence. This has translated recently in a situation where we see that the multilateral frameworks are somehow destabilised and overwhelmed, as witnessed by the spread of economic restrictions on trade and investment flows, of exceptional duties, the tariff duties on the spread of economic sanctions, and so on. On the witness also by the spread of uncoordinated industrial policies and increased state interventionism. So this is a situation marked by increasing geopolitical tensions. But I think it's fair to say that at least until now, the result has not been, at least not to a large extent, it has not been decoupling or fragmentation. We've seen a kind of plateauing, and Gabriel showed it in figures a moment ago, in terms of the intensity of world trade. But there is no established trend toward decline in economic and financial relations at the world level. There are some cases, some specific places where this is indeed a decline. And this is, for instance, the case in terms of the bilateral trade relationship between the US and China for well-understood reasons. But it is remarkable that even in that case, for instance, study after study, it is shown that when the intensity of direct trade between the US and China is declining, indirect trade is actually increasing, meaning that the US is sourcing less imports from China. It will be sourcing more from a variety of countries, say, Vietnam, Mexico, for instance. And these countries themselves are sourcing more components from China, meaning that aiming at decoupling what we are observing actually is not decoupling a fragmentation, it's more diversion with ensuring costs and opacity. And questions about whether this is reducing in any meaningful terms risk or degree of dependence. So I think somehow we have to live with this inter-economic and financial interdependence. Of course, the situation of geopolitical tensions and economic interdependence create a very strong temptation to leverage interdependencies for political purposes, to weaponize them. And I think that's really a defining feature of the present situation. But it's also a very difficult objective, difficult because economic and financial exchanges are defined by a principle of mutual benefits. They are taking place because they are benefiting both parties, meaning that it is very difficult for one of them to usefully leverage them. When is it possible? Well, when there is a situation with a very pronounced asymmetry. And only in such case is it possible really to efficiently leverage these economic and financial interdependencies. And I think this is a reason why in the recent examples of weaponization of economic dependencies, we are seeing the increasing importance, the overwhelming importance of finance, of information and knowledge. Because these are interdependencies, these are activities that rely upon very concentrated networks. Think about the monetary system with the role of the dollar. Think about international banking transaction with the role of the SWIFT system. Think about information with social networks or about high tech and semiconductors, for instance, with intellectual properties. Each of these cases, you have very complex networks where a few short points, as Henry Farrell and Aimee Newman have called them, are taking central importance and can be leveraged and have been leveraged for many of them recently. So it's a situation that in a recent paper published together with Tomagomar, we define as geofinance, meaning to reflect the fact that it is marked by an increasing politicization of financial and information flows. And it's somehow different from what we used to think in terms of geoeconomic competition in the 1990s or the 2000s, which was mainly taking place within the framework of multilateral institutions. Here, in many cases, this competition and this weaponization is in breach of international commitments. So I think it is not surprising given this situation that economic security is becoming an overarching concern for governments. With many two objectives. The first one is to reduce vulnerability and build leverage with regard to these short points, to these critical notes in the world economy. And the second one is to control or at least master to some extent foundational technologies. And here I think the interaction is very strong with climate change, because climate change is already an ongoing revolution in terms of for industry, for trade, for raw materials and energy. It's redefining the key technologies, it's redefining the way markets are working. So the challenge today for many governments is how to reach, how to improve economic security. In a context where increasingly for the reasons I described, they are not considering international markets, world markets are secure enough. In a context as well, I think it's worth emphasizing that where isolation is clearly not the solution for two main reasons. The first one is efficiency. International division of labor is a sine qua non of efficiency today, especially for sophisticated technologies. And the second one could be a last term relational power by Susan Strange. The need to have allies or at least to have partners to support your views. And we see that in this context of tension, this is increasingly important. So relational power requires openness, requires significant economic and financial relationships. So this is a challenge. I think it is really important to emphasize as well that increasingly the response of governments is using more ambitious, more widespread industrial policies. And it's worth as well emphasizing that while in the 80s, for instance, we'll be economists were commenting a lot, the fact that some policies were used as a way to kind of appropriate rents as rent shifting policies. This is a typical example for that was the competition between Airbus and Boeing as the efforts of government to somehow appropriate the oligopolistic rent in this sector. Today it's more about control, about power than about rent. And but the same kind of logic is taking place, a logic where everyone is trying to appropriate and everyone needs to somehow to retaliate to what others are doing. So I'll conclude just by emphasizing the threats involved in these trends. The threats, of course, are additional and useless costs from an economic point of view linked to these additional obstacles and constraints. It's also in the additional rigidities ensuing from this constraint, and I think that means a lot in terms of adjustment capacity for the world economy in the time to come, with of course, a significant risk of escalation. All this for a benefit which we can discuss it, but I think so far is very limited in terms of de-risking as the term, the fashionable term put it. And finally, the last and probably most dangerous threat is that all these constraints jeopardize the capacity of coordination at the world level. So I think this is a very important challenge in terms of economic governance globally. I think part of the response should lie around somehow ring fencing the security concerns in the world economy and the world finance and as a precondition probably to update coordination and rules in other sectors. Thank you. Thank you. Thank you very much indeed. Sébastien, I take it that your exploration of the impact on global economy and trade in particular and also the overall industrial diversification associated with the tensions associated with this will to de-risk to have a world in which we would incorporate precisely these major changes in the global tensions is something which is very important. I take it that with global trade being under the impact of this French shoring, reshoring or whatever, of course it has a cost first and second it has an impact on the global growth and it has also an impact on inflation to be frank. So all this is intertwined in a way which is very striking. Thank you very much Sébastien. John, you have the floor. Thank you. Thank you very much. And first to Terrie Montbrie, congratulations on this new edition of the World Policy Conference and thanks for including me and having the chance to appear on this panel with my friend Jean-Claude Trichet and his other illustrious colleagues. Let me make a few comments on the outlook. It's quite appropriate that the timing of our conference today comes just weeks after the G20 Leaders Summit meeting in New Delhi and the IMF World Bank annual meetings in Marrakesh and as we heard from the minister and we know in just a few weeks the COP28 will be meeting here in Dubai to discuss progress or hopefully to make progress on climate change issues. I'll take as my starting point for the outlook the world economic outlook of the fund, no offense Gabrielle, they're very similar, they're very similar. The IMF noted that global GDP grew 3.5% last year, 3% this year, their forecast for next year is 2.9%. And that's compared to the, in the space between 2000 and 2019 that's including the global financial crisis, world GDP growth had averaged 3.8% and the IMF's forward looking forecast is for the next five years of growth of 3.1%. In other words, by historical standards, this is a very mediocre outlook at best. They also characterize the outlook is rather uneven and quite uncertain. And notably, they don't expect inflation to return to its pre-COVID performance until at least 2025, not a very pleasing result or forecast. So what are the key issues? To me, one of them is exactly the outlook for inflation. Right now, central banks are advertising that their rate policy is likely to be higher for longer. Of course, that depends on their expectation that inflation is going to be relatively sticky. It certainly seems reasonable at this point, but we also shouldn't forget that it wasn't that long ago that central banks were advertising their policy as lower for longer. It really is going to depend on the outlook for inflation. Here it's possible that there will be not differentiation in target as Jean-Claude underscored, but differentiation in outcomes. And if so, this will have a substantial impact both on global markets, but also on the status of financial risks. Right now, a substantial perception of financial risks is related to the substantial rise in long-term interest rates, especially in the U.S. And the combination of losses that that implies for current holders of these securities and interplay with likelihood of continued high policy rates. So simply to say, I'll leave it with saying, if inflation outlook is more favorable than the consensus, just as it was turned out to be more difficult than had been the previous consensus before the COVID-related inflation hit, these worries could diminish. But it remains quite uncertain. A second key issue, of course, is one of the sources for both the differentiation in economic outcomes, but also the pressure on long-term capital markets, has been the substantial run-up in debt, especially in the fiscal sector, especially among other places in the U.S. And the assumed pressure on budgets going forward that also are an important element of the perception of likely financial and economic risks. Once again, this remains controversial in many countries in Europe, but especially in the U.S. The outlook for the election in the coming year, and I know we'll be having a session on these things later in the conference, could have an impact on the outlook for public deficits and the growth of debt. There's an obvious linkage that is often overlooked. One of the reasons why the run-up in public debt that occurred in the wake of the global financial crisis was not as anywhere near as destabilizing as many thought, was because of the continuation of very low interest rates, including long-term interest rates, which meant for many years following the crisis, despite the increase in the stock of debt, the percentage of government revenues that were dedicated to debt service was declining, not rising. It's only in the last few years, last couple of years, that that trend has been reversed. Hence, the centrality of the future performance of inflation and the outlook for fiscal policy. Another key issue, of course, and one that's been discussed already, is that for trade. For sure, we've seen the following. Essentially, for the 60 years following the formation of the Bretton Wood system, global trade grew faster than global GDP, almost without exception. In other words, just as the architects of the postwar system had anticipated that the restoration of a global trading system was going to be a key element driving global development. Hence the global financial crisis, let's call it the end. For the past ten years, eight of the past ten years, global trade has grown more slowly than global GDP, and that remains the case this year. And the outlook going forward certainly remains problematic. There are various forces that are at work here. One is, for sure, the use of sanctions and protectionist measures that Gabrielle's slide showed us. These are, and the threat of additional use of protectionist measures is an ongoing threat. At the same time, however, in response to COVID, the experience of COVID, there's been a much greater attention paid to the resilience of supply chains. So some of what we see in the changing direction or the changing nature of supply chains in various markets is certainly trade diversion, as Asean was telling us. But some of it is, let's call it more organic, attention to the issue of resilience and reliability of trade and of supply chains in more extreme circumstances. Time will tell, but the recent G20 Leaders Summit pledged to restore the functioning of the WTO and to work towards a more open trading system. However, when you read the content of their undertakings, it is far from certain whether this is going to happen. Why this is particularly important is because of the growth in trade and services that is, of course, complicating because it is not well dealt with in trade legislation. And secondly, the prospect of new technology that could once again bring forth an improvement in productivity growth similar to what we saw in the 1990s. So this, the development of technology and the evolution of the trading system is going to be, is going to be very important. And in that context I should have mentioned already, the increased, the increased use of subsidies and other forms of industrial policy and that's risk of complicating the trading system. So was there something new that has come out of this round of meetings of global leaders? And I would say yes, and that is a much greater focus on the provision of what are called global public goods. Matters to deal with climate change, environment, health, food security, etc. What has happened so far is a much greater attention at the level of intentions to deal with these issues that would imply potentially non-trivial changes in public policy and in the, the provision of these goods at a global level. But what is also clear at this time is the lack of clarity about how this will be accomplished. So it's an intent, a substantial, potentially substantial new public policy initiative at a global level that so far in the, if we look at the latest round of, of meetings is more intention so far than real action. But it's something to watch closely. I'll stop there. Thank, thank you very much indeed, John. I take your point on the longer, higher, for longer coming from the central banks. My interpretation is that they have to fight permanently against market participants that are calling for industries decreasing as rapidly as possible. So it's, it's a way to counter spontaneous that we, I would say move that we understand pretty well because they are talking their books and it's normal that the market would give that signal. And I take from all what you said and it's also valid for the other speakers this idea that de-risking is okay. De-coupling would be totally catastrophic, which is more or less a message coming from Europe also in the difficult circumstances in the geostrategic tensions that we are experiencing. So I turn now to Marcus. We are up to you, Marcus. What would you say? Well, I think we've reached the point in the morning where everything has been said, but I haven't said it. When I was, when I received the invitation to participate in this panel, I eagerly accepted because it's a great honor. I looked at the composition of the panel. I saw that we had so much talent on macroeconomic and financial matters that I thought I would focus on effectively microeconomic issues as kind of a compliment. I think we were in the midst of a transformation of international trade and investment relations driven by the revival of industrial policy in the major economic centers. Compared with the previous international trade regime, this system will be more complex and considerably less transparent. It will be vulnerable to political capture by special interest groups. It will possibly be accompanied by overall reductions in economic efficiency and will give rise to international tensions. So how did we get here? There are two principal drivers. The first, which I hope, if not all, most of us could agree on, is global warming and the need to adopt policies to internalize externalities that the market will not do on its own. The second is more controversial, and that's the geopolitical justification, and I think the best intellectual rationale for this was actually provided by Canadian Deputy Prime Minister and Finance Minister, Christia Freeland. She argues that, in essence, during the Cold War, the West got lucky. The Soviet Union self-isolated, so the West was free to construct a liberal open order, and there was no contradiction between engaging in trade and investment relations, everyone prospering together, and military security. In contrast, in the present, China has embraced the global economy, and so this creates a tension between economic integration on the one hand and military security concerns on the other. That is the intellectual justification for what was called decoupling. President van de Lijen of the European Commission, more politely called de-risking, which you just referred to. In the case of the United States, these two concerns have been met by two sorts of policy thrusts. In the case of the geopolitical objectives, the concern centers on semiconductor chips, the two main policies have been the CHIPS Act of the United States, and then a set of export controls aimed at restricting export of chips and manufacturing equipment to countries of concern, mainly China and Russia. In the case of climate change, the thrust has been through two big pieces of legislation, the Infrastructure Investment Jobs Act and the Inflation Reduction Act, often called IRA. And for these remarks, I will focus on electric vehicles and batteries. In both cases, the policies are complex. They're not entirely transparent. They make considerable demands on government competency and ability to implement effectively, and they've caused heartburn in partner countries. The CHIPS Act allocates a bit over $50 billion for subsidies for production and research and development over the next four years. It prioritizes supply chain security, that is to say chips currently made in Taiwan. It is open to both domestic and foreign firms, and particularly interest of firms from Taiwan and Korea, and it excludes China and Russia. And companies receiving that funding have to, I cannot build new capacity in China for 10 years. The export controls aim at deterring high-end production in China, which means that the policy is dependent on third-party cooperation. This is a case where the US government got lucky that the nature of the semiconductor industry is there are some choke points that require minimal cooperation from third parties in order to implement. But there's no guarantee that will be the case in the future with industries of very different industrial structure. Think, for example, biotech. The US is not alone. Europe has its own CHIPS Act. Japan has adopted a similar set of reshoring or friend-shoring incentives, and, for example, is providing subsidies for an American firm, Micron Technology, to build a plant in Hiroshima. So while the US is leading the charge, it is not alone. In the climate change, again, I'll just focus on electric vehicles, because that's where a lot of the current trade action is. The US legislation creates consumer incentives. It builds out the charging infrastructure, encourages domestic production. But the way it did it had a strong domestic preferences, which caused problems with our partners. One of the things you need to understand about this legislation is, the IRA is 1,000 pages long. The Congress didn't know every detail of what it was voting for when it enacted it. It has all sorts of unintended consequences. One of these was to make those consumer incentives apply to American-built automobiles, but not ones from Korea or European Union, who understandably got upset. Some enterprising bureaucrat at the Department of Treasury who probably deserved some sort of Nobel Prize on Applied Economics discovered that there was a provision written for trucks, which are normally leased, which if reinterpreted could be applied to cars. And the Koreans and the Europeans could continue to export to the United States and get the consumer subsidies. Likewise, the legislation incentivizes use of non-Chinese minerals and the production of the batteries for those cars. And it's created because of our vision that essentially endorses production and free trade partners. It has created the strange phenomenon in Washington where Korean firms who build the batteries are lobbying the US government to conclude free trade agreements with Indonesia, Philippines, Argentina, and other potential sources of supply. And it appears to be kind of a software patch, so to speak, and it wouldn't be surprising if the Congress went back and revisited some of these provisions if the Congress could actually act, which, given the dysfunction, is an open question. Implementation is complex, it depends significantly on administrative regulations. It's not transparent. It is costly to remain informed and that non-transparency creates opportunities for political capture by special interest. Europe has its own CHIPS Act. It also has the carbon border adjustment mechanism, or CBAM, which is going to create problems as well. So more broadly, the European Union is tackling these problems with an emphasis on taxes. The United States is emphasizing subsidies and tax provisions, and there is a need to bring, to reconcile these differing approaches to generally commonly shared goals. There is a real question to me whether the US government is currently constituted, is up to the task of implementing a policy as complex as this one. And I heard that President Macron has closed ENA, the French School for Training Public Administrators. He might consider reopening it in the United States. Thank you. Excellent conclusion if I may, Marcus. To be frank, the name is different. I'm not sure that the education will be that different, but we will see. So I guess that usually we go for a new round for second remarks to be made, particularly to criticize what had been said by the other members of the panel, or to compliment, or to do anything. But any of us has the will to communicate something that would be complementary to what has been said. Otherwise, I go again, Gabrielle, you would be the first for this second remark. Would you agree? Yes. You have the floor. Yeah, thank you very much. No, there's not much disagreement here, I think, amongst the four of us. Unfortunate for the conference, of course. But I think what we must stress more than we did in these last 45 minutes is the internal frictions that we're facing within the United States and within Europe, probably also within China. We don't see much into it, but I guess it's there as well as an explanation for what we see in our external relationships. And if you look at the regional elections in Germany in the last months, you see the increasing polarization that's fed by inflation, but it pushes countries into a more, let's say, aggressive external policy stance as well. And the conundrum is, on the one hand, to get inflation down, to make sure that the internal cohesion improves. On the other hand, this external assertion-ness or whatever it is, call it decoupling or de-risking or the search for strategic autonomy, all these things, that is actually making it harder to achieve those internal cohesion objectives. As has been said, the fragmentation is costly and that will be borne by whom, most likely, by the most vulnerable and it makes these internal divisions even stronger. So that's a conundrum that I see a little bit out of wits here. I don't know how we can deal with that, but I think the first step has to be to see that those de-risking policies tend to increase inequality and then that fosters polarization with consequences that lead to more external frictions. Thank you. Klerina, Klerina. Sebastian, what would you say? Thank you. First, perhaps a comment about the fact that we are discussing the difficulty of coordination, the difficulty to stick to international commitments and rules. I just want to emphasize that I think it shouldn't come as a surprise that rules, multilateral rules, are not able to contain great power competition because by themselves, as they cannot, rules are unable to contain great power competition as long as there is no political agreement upon the directions, the objectives. So I think that should be reaching some kind of political agreement about the framework of coordination should be the priority. The second point has to do with coordination and inflation. A lot has been said about the financial risks entailed by the policies, monetary policies in advanced economies recently. I think it's a good illustration of the threats involved by the lack of coordination, the fact that it will increase asymmetries in the world economies. In the world economy, it makes it increasingly difficult to take into account a variety of objectives because it will make coordination on various counts less easy. The development, the spread of industrial policies is another example because that's only something that countries with enough financing can sustain. So it's also a source of asymmetry of lack of inclusiveness at the world level. Thank you very much. Your remarks were valid for Europe as well as for the global economy. I have to say I am struck myself by the convergence on both sides of the Atlantic on the monetary policies on the first results of monetary policy, coordination being more or less the same. When we were in very difficult position, the Europeans were hit by the war in Europe much more than the US, obviously, in terms of, I would say, price of oil, price of food, the fact that the US is self-sufficient in many respects, both in fossil fuel and also for food. And that, of course, creates a difference which is very, very substantial, obviously. And nevertheless, I mean, the goal remains the same. The likelihood of reaching the goal is, in my view, as credible as it was before, before war in Europe. And so that is something which is the silver lining if I may in comparison with what you had on both sides of the Atlantic after the first and the second oil shock, which was totally dramatic, inflation unleashed, inflation steady at 14% and interest rates at times at 20%. So we are, I would say, claiming that 5% in the US, 4% in Europe is too much, but I mean, we experienced 20 because we made mistakes in the previous time, in the previous oil shock. Anyway, what would you say, John, yourself? Well, first of all, just to continue on what you've just been saying, it's very positive that we've made progress on inflation, and like you say, that at least for the moment, the progress is quite similar on both sides when we look at core inflation. What may be left as a residual effect of, among other things, the war in Ukraine is a difference, a change in price structure relative to what it was previously. In other words, it's quite likely that relative prices of energy in Europe is gonna remain higher than it was previously. In other words, this is undoubtedly going to be associated with structural change in economic growth in Europe and in trade patterns as well. Another aspect that I wanted to mention was that we've saw an incredible boom in the Chinese economy in past years that was associated with huge increase in demand for basic commodities, metals, et cetera, of imports to the Chinese economy from elsewhere, huge increase in exports of manufactured good from China. My sense for my recent visit is China is changing substantially. The source of their economic growth is going to have to change and it's going to slow down, and the growth in domestic demand in China is slowing down and is likely to remain relatively calm relative to what it's been previously, and that's one reason why trade is going to remain more subdued and different than it was before, not just because of subsidies, of course that's part of it, and not just because of sanctions, but because of some underlying changes in the global economy. That brings me back and wanted to make a quick comment. So we've seen these large challenges, and I would say, and as Yom pointed out, that previously when the G20 was founded in the context of the global financial crisis, it was able to act decisively because among other things, there was a lack of a sense of great power conflict, as you remember, that it wasn't that individual countries forgot their interest, it was a real sense that if we don't hang together, we will hang separately. But time has shown the weakness of the structure or lack of structure of the G20 that it has on the one hand put itself as above the multilateral institutions, but itself has no legal standing and has no voting process other than there's a veto power on the part of every participant. As a result, it's an organization that finds itself very hard, or I don't even want to call it an organization, but it's an entity that finds it hard to reach decisions and command action in a context of either difficult or conflictive issues. And I think it's worth contemplating whether if we're going to make real progress on global public goods that inevitably are going to involve difficult decisions that are not necessarily to everybody's liking if we're going to have to think about whether they need to be reassigned in one way or another to multilateral institutions that do have a structure that leads the decisions and can reach decisions that have legal legitimacy even in issues in which there's not complete consensus. Thank you, John. What you say is certainly true at the level of the United Nations and the Security Council and so forth. I am a little bit more optimistic after the last G20 meeting in Delhi. It seemed to me that the concept of international community was still alive, a little bit alive. That being said, of course, it's not perfect. Marcus, you had already the privilege to hear all of us, so what would you say now? As the second round? One last gasp of international community. So if you set aside the geopolitical concerns and just focus on climate change, there's clearly a need for the United States, European Union and China to get on the same page and find ways of reconciling their diverse approaches to this problem. My institution recently hosted a conference on the macroeconomics of climate change organized by Jean-Passani Ferry. And there was a paper presented there by two of my colleagues, Chad Bown and Kim Clowsing, who argue that relatively minor changes to the WTO rules could go a long way in reducing conflict between the EU, the US and China on climate-related issues. The problem, of course, is even minor changes the WTO rules are gonna require a real diplomatic commitment. And I don't know if we're up to it or not. Well, very good remark indeed. So good cooperation between Peterson and Pissani, Jean-Pissani Ferry. I was myself chair of the board of directors of Bruegel Institute. So I see that, and we have also a friend of the Bruegel Institute who's also in Peterson if I'm not misled, Nicola. Anyway, so perhaps we have a little time to take a question. I see three hands. So, madam, you were the first, please. Ilona Antoniusian from Poland, but I'm working for Volkswagen and you were commenting on the electric cars policies around the world, which is actually concerning me for the last three years, day and night. I wouldn't be so hard on IRA, the Inflation Reduction Act. Actually, I think it is a stroke of genius because it increased the speed of investment in electric car technologies and these are gigafactory size investments each time, which is $5 billion every one of them. So it is making a huge change because the big producers now started to invest quickly. You made the rush, which is actually following the rush from China. So the Chinese have a very stable support mechanism for electric car production and they have made a great industry out of it. So, right now, IRA made it possible to make this kind of support. So actually following China and in high speed in America, which made following by Canada, which made following by Europe. And right now, Europe changed so much the rules that I'm right now, I were able to work with the Polish government to establish in high speed great, really great location parameters for gigafactors and we established one and we are looking for others. So I think, don't be so hard on the IRA, I think it was a good one. Marcus, do you have a response or a comment? Well, as an American speaking, before an international audience, I have an obligation to be more Catholic than the Pope. So I'm very glad that you find IRA to be such a stimulus to important policies around the world. I agree. Okay, John, I know you're American citizen, you don't have to be more Catholic than the Pope. Well, I was, I must say, I've been struck by two things recently with regard to electric vehicles. And I guess I should say it's been clear I own one, but I was struck in China, how common they have become, how rapidly you can tell because the electric and hybrid vehicles have a different color license plate than others. And I was astonished at how common they have become. Given the, it wasn't obvious that how developed the underlying infrastructure is, and we know that China is on a very rapid process of building new electric plants that actually are not necessarily low emission. In the States, in contrast, as you probably have read, after an initial spurt of demand for electric vehicles, they seem to be slowing down. And it's not, although it's the IRA, contemplate some subsidies to things like charging stations. I suppose it's not immediately obvious that the consumer acceptance is going to be so rapid without also sustained and substantial consumer subsidies. So I think the future here remains a bit uncertain that... Okay, thank you. Thank you very much, John. I had other questions over there. Could you get a mic, yeah? Jean Alola from BBE France. Thank you to all panelists for your insightful deep dive into economic outlooks this morning. I find you discuss a lot about security, risk management. My question to you is, what is the good news? What do you see upside in the current situation for whom and where? I'm not sure that I got exactly the question. Who could respond? Gabrielle? If the question was worth the good news, I think there is good news. One is that we are not seeing tea globalization as was feared by many when the US-China trade war broke out and with all this crisis hitting. We see globalization as the economist put it. I think that's clear. But the global system, the trade system has actually been relatively resilient. The other piece of good news is I'm worried about financial risks not yet fully materialized, but what we can say is that this first appearance of bank crisis, the Silicon Valley Bank and these sort of things have been very well managed and contained and there hasn't been any diffusion of those risks yet. I'm not sure whether we've seen the end of it, but that is good news as well. And the third piece of good news is that the subsidy raise that the IRA is part of it, that economists feel uncomfortable with happens in the right area because what we do need is more investment in renewables, in electric vehicles, et cetera. And there is subsidy raise is beneficial. If it was in steel or in, I don't know, in old fashioned industries, something different. But because we are facing a global common good here or bad actually, the climate change that needs to be fought, this investment raise is something that's positive. And so that's three elements of more positive news, I guess. Well, thank you very much. We are not only with bad news, but also good news, Gabrielle is eloquent on that. Let me say, Gabrielle, that I'm not sure that we will be always unsatisfied with the behavior of the non-banks. For the banks, the reaction has been very effective and in Europe, for instance, we had applied by the rule of the Basel committee and so forth on the G20. And so we were reasonably protected until now, as you said, you remain prudent. But on the non-banks area, as you say, we don't have seen all the consequences of the higher rates. Maybe, yeah. Please, Sebastian. Quickly, I think from an economic point of view, the good news is also that so far, despite the immense political tensions, political shocks, the world economy has been pretty resilient. And given the shock it went through, it's true about the economic consequences of the COVID pandemics, about the economic consequences of war in Ukraine as well. So there has been economic cause, but not that much compared to the gravity of the crisis. And I think it's good to emphasize that. The COVID crisis was a moment where vulnerabilities were became more visible for the public. But I think that was actually a moment when these international value chains proved their resilience more than their vulnerabilities. Because within months, weeks in some cases, economic activity rebounded. Thank you very much indeed. I'm turning to our founder. It is 10 o'clock. Shall I consider that we went through all what we had to examine? Or have we got a little time more? No? So I understand that I have to thank all the panelists. They were remarkable.