Sunday, October 5, 2008

Sauve Qui Peut

. Sunday, October 5, 2008

French President Nikolas Sarkozy, in his capacity as EU President, called an emergency summit this weekend among the four largest EU members to discuss EU cooperation in face of the financial crisis.

The gathering failed to produce a constructive response. They agreed on the need to work together, but proved unable to agree on how this cooperation might be best pursued.

EU leaders seem torn between two unproductive orientations.

Along one path, EU governments seem determined to see this as an American crisis that they can somehow avoid, rather than a global financial crisis that they cannot. Gordon Brown said pointedly that the crisis “has come from America.” Mr. Berlusconi claimed that “Europe is not facing and never faced the risks in the American system.” Europeans, he said, “set aside money in savings.”

Along the other path, EU leaders have pursued uncoordinated national responses and then criticized each other for the half measures each takes (see how EU governments have reacted to Ireland's decision to guarantee 100 percent of deposits). Such behavior has prompted Peter Mandelson to warn of the dangers of a “new wave of economic nationalism”, which would create “distortions” and lead to an approach of “every man for himself”.

I fear that this approach reflects a failure to comprehend how the world has changed, and is more likely to aggravate than mitigate the crisis in which we find ourselves.

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