Nout Wellink: "The potential for real problems in the monetary system has been further increased"

Paul Buitink talks to Nout Wellink, former president of the Dutch Central Bank (DNB), about the new EU fiscal rules, gold, China and the United States.

Wellink is concerned about the new fiscal rules. He hopes that we will move more towards German rules such as the Schuldenbremse: "If you have the deficit under control, the debt will be fine." He believes that the French plan to reduce the budget deficit is going in the right direction, but wonders whether it is feasible because of the political situation in France.

Mario Draghi presented a report on Europe's weak competitiveness in September. Wellink believes that Draghi has written a good report in terms of analysis, and is positive about goals such as: cheaper energy, more innovation, attention to the safety aspects and common funds. However, he sees a challenge: "The road to get there is paved with major problems."

Wellink sees uncertainty as the dominant factor in the development of the gold price. He also cites lower interest rates and the freezing of Russian assets as factors. He also looks back on the sale of DNB gold.

According to Wellink, economic considerations and security considerations are currently inextricably intertwined when it comes to China. He gives the example of import duties on electric cars. Wellink indicates that the basic principles of American China policy are incorrect. The Chinese are not becoming democratic, and we cannot keep them at a technological distance.

Europe needs to realise that America is becoming intrinsically unstable, says Wellink. “... we have to be very careful not to do too much what the Americans more or less dictate us to do."

They also discussed the situation in Taiwan. Wellink considers the chance of a military invasion to be extremely limited. Finally, they discuss the Chinese economy and entrepreneurship.