Bas Jacobs on the concerns around the coronavirus and Brexit

Unjustified panic

‘I believe we are overreacting with the seriousness of the coronavirus’. Jacobs points out that last year, in the Netherlands only, about 4000 people fell ill from the influenza virus and about 3000 died from it. In comparison to the coronavirus, with only a few hundred fatalities until now, there is little to worry about. ‘We are very good at raising fears because of what the media reports. I think it is important to try to keep calm.’

Unrealistic goals

According to Jacobs, the Brexit will still take a very long time. ‘Johnson wants to finalize a trade agreement within 11 months comparable to CETA. That trade agreement between the EU and Canada took about 7 years to complete. I think his goal is very unrealistic.’ Johnson is trying to reduce the uncertainty among the British population by setting this deadline. However, the European Union has little incentive to cooperate and make Johnson's life easier. Besides the fact that the EU is economically hurt by the Brexit, giving Britain a lot of freedom on an economic level will also politically hurt the EU by making it attractive for other countries to exit the EU as well. 

Jacobs also talks about what he believes the Central Bank should do in case of a deal. He believes this will all depend on the trade agreement between the EU and Great Britain. If England will take a very long time forming the agreement, the result will be a decrease in demand for money. In this case, the Central Bank would be better off keeping the interest rates low. However, if England can form a stable agreement in a relatively small amount of time with enough room for free trade and limited trade tariffs, there will most likely not be a decrease in demand. Both scenarios are, however, equally likely and the future still very uncertain.