Colombia’s President Juan Manuel Santos said Friday he will be meeting with bankers, employers and unions to jointly prepare the country for a possible fallout of Europe’s debt crisis.
Following a week of turbulence on the world’s stock and currency markets, Santos called on the financial sector and labor organizations to meet in Bogota this week because “preventing is better than regretting.”
“The coming week I am thinking of inviting employers, workers and the financial sector to sit down with other players and see how we can prevent harm facing the international situation if that continues to worsen,” Santos said in a speech in the northern city of Cartagena.
The President said his idea was to reach accords with the different players in Colombia’s market to prevent the different sectors from acting alone and causing “a vicious circle.”
“For example, the first thing the financial sector does when the situation is difficult is protect itself and suspend credit lines, the flow. ‘We will not lend until the situation is clarified.’ This results in what? That the businessman says: ‘They will be taking my credit, I anticipate and fire people.’ And that results in what? ‘That they start firing people. Then the labor and workers sector respond: ‘Do not fire us’ and the strikes begin and it becomes a vicious circle which will only add to the cost of the crisis,” Santos said.
“If we are mature and intelligent enough and show enough foresight to sit down and say: ‘Gentlemen of the financial sector: if you really think there is serious danger, come and we discuss what guarantees the government can give you, but not do not suspend credit. Businessmen: don’t suspend or diminish your work force because all that does is diminish demand and the economic activity,” the President added.
Colombia’s GDP rose 5.2% in the second quarter of this year. However, while facing ongoing concerns in Europe over the debts of Greece, Italy and Spain and the effect on the Euro, Colombia’s stock market and peso proved turbulent the past week. Economists are concerned about an economic recession similar to that of 2008.