There will always be a price at which to export. Thus, the greater impact is a decrease in the prices of our exports, since quantity limitations are smaller (Figure 9). Although lower prices push producers towards reducing their supply, with the ensuing implications on employment, output and investment, it is very different from what happens, for example, to producers of intermediate goods, specific for the automotive industry. Their demand falls dramatically and all their already started production piles up unsold. And this leads to a subsequent production standstill. This explains the intensity with which the crisis is impacting the more industrialized economies of Asia. To sum up, the international crisis is bearing real effects on our output, specifically on our exports, but its reach in Chile is more limited than the effect on other economies which are based on manufacturing exports. (iii)  Global confidence crisis  As from last September, global confidence plummeted throughout the world (Figure 10). Individuals as well as companies adopted a “wait-and-see” attitude in view of the high uncertainty and deterioration of the economic outlook. As it is likely to happen in more uncertain scenarios – and, in this case, extremely uncertain – , individuals stop consuming abruptly and companies dramatically revise their investment and production plans. Therefore, propagation of the financial crisis effects was worsened by a massive loss of confidence. These losses of confidence may lead to recessions which are self-fulfilling prophecies.
18 This appreciation puts up the price of Swiss exports abroad or narrows the margins for Swiss exporters – or a combination of both. This will be reflected sooner or later in the export figures. Indeed, in recent months, the recovery of Swiss goods exports has slowed markedly; although this is also related to a slowdown in global economic momentum. The financial crisis and financial market concerns regarding the public finances of a number of industrialised countries have increased demand for the Swiss franc as a safe haven currency. The stability of the euro area is therefore an important factor influencing the Swiss franc and the Swiss economy as a whole. EU citizens clearly have a vested interest in the stability of the euro. The same is very much true for the citizens of Switzerland. I am confident that the EU will ultimately succeed in once again deeply anchoring a culture of economic and financial stability. Earlier this year, European politicians and policymakers began to take decisive action to that end. As we all know, crucial challenges lie ahead. These call for determination, courage and perseverance – not only from policy makers, but also – and most importantly – from the citizens of the EU. I am confident that the EU and the euro area will overcome these challenges. In the past, Europe has always emerged stronger from periods of difficulty.