The president of the European Central Bank (ECB) said Europe doesn't need to boost spending more in order to triumph over the global financial crisis. This puts the ECB in line with most European governments and squarely at odds with the U.S. over the approach needed to combat this worldwide emergency. In fact Mirek Topolanek, the prime minister of the Czech Republic and current president of the European Union called the U.S. emphasis on fiscal stimulus “the way to hell”.
Now while there is much to be critical of in the Obama administration’s response to the economic crisis, at least they are trying. Europe, on the other hand, has essentially declared that the crisis will solve itself in due course and wants to sit back and watch. Germany and France, in particular, appear to be looking for a free ride off the U.S. (and many would say “what’s new”?). Knowing that their economies are almost entirely export driven, you don’t need to be Einstein to understand how Germany and France will be big winners if the U.S. stimulus package works – without them having lifted a finger to help. This is a most grotesque and selfish form of protectionism whereby Germany and France keep their national debt stress-free and stave off the possibility of high inflation while sitting back and allowing other countries to suck up the pain and do the hard work. Sadly, the obvious response to such selfishness is more protectionist policies; which is no solution at all.
This should be an interesting G20 summit meeting next week – which would be a change for the better as well.
Now while there is much to be critical of in the Obama administration’s response to the economic crisis, at least they are trying. Europe, on the other hand, has essentially declared that the crisis will solve itself in due course and wants to sit back and watch. Germany and France, in particular, appear to be looking for a free ride off the U.S. (and many would say “what’s new”?). Knowing that their economies are almost entirely export driven, you don’t need to be Einstein to understand how Germany and France will be big winners if the U.S. stimulus package works – without them having lifted a finger to help. This is a most grotesque and selfish form of protectionism whereby Germany and France keep their national debt stress-free and stave off the possibility of high inflation while sitting back and allowing other countries to suck up the pain and do the hard work. Sadly, the obvious response to such selfishness is more protectionist policies; which is no solution at all.
This should be an interesting G20 summit meeting next week – which would be a change for the better as well.
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