With regard to the attitude of Europeans on the financial crisis that originated in the United States, they have first looked on "a fire on the other side of ocean with much indifference" and then called for "an emergency fire fighting" before going all out "to put out the fire".
The European Union (EU) countries that use the euro currency and Britain have put up a total of 1.7 trillion euros (2.3 trillion US dollars) in guarantees and emergency aid to help their banks. In recent days, EU leaders have been seeking to persuade the United States government to hold a global finance summit and spur the establishment of a new, international currency system.
Changes in the Europeans'attitude are ascribed mainly to at least three factors: First, they are not so well-informed. European statesmen had overlooked the impact of the financial crisis at first, namely, they failed to see how much the financial crisis could "infect" their countries as they had not been clear how deep European banks could "sink" in this crisis until they came up with their bailout plans when a lot of banks were exposed with an acute fund shortage.
Second, there are chain actions. Ireland acted on its own to guarantee all bank deposits in the country and this gave rise to the "tide of capital inflows". Investors immediately began withdrawing their money from banks in other countries and transferred it to Irish banks. So, other countries had to adopt measures in response to cope with the problem.
Third, France currently holds the EU rotating presidency. Crises one after another over the past half year happen to provide French President Nicolas Sarkozy with fine opportunities to "realize his ambitions". The bailout and reform measures of EU have been cited by a European mainstream media as "Super Sarko's plans" alive with vivid French hallmarks or characteristics.
Emphasis on government intervention, the upscale of government-imposed deficit limit and the enhancement of financial supervision are some of the conventional practices the French government has long sought after.
While appealing for the institution of new international monetary and financial systems, EU eyes the role of China, India and other newly-emerged countries into the global finance summit dialogue setup. In so doing, it also has a strategic intention to enable Europe to have more and greater say in the global banking system.
To Europeans, the euro currency has gradually accumulated strength as a global currency with a growing "fresh spurt of energy" that could possibly challenge the global supremacy of the US dollars. When the latter is "swaying" or "even tottering", the euro is "trying to show off." Moreover, it is high time now for most part of the European Continent to reinstate itself as it has been biased or discriminated against by the Anglo-Saxon mode for decades.
These measures of vital importance taken by Europe, nevertheless, are skeptical, as they have three cruxes yet to be solved, namely, mutual understanding, fulfillment and confidence.
All 27 EU member states, Switzerland and Norway have reached tactic understanding in providing rescue endeavor and bank guarantees, but big banks with abundant capital are not necessarily grateful. In case of Barclays Bank PLC in England, it rejected a British government-assistance scheme with an excuse of retaining its independent status, and greatly discouraged or disheartened politicians. So attention should be paid to the forging of mutual trust between the governments and banks.
If there is no bailout, the economy may go into a recession but, if the reckless financial institutions engage in speculation with the bailout, money that has been injected would be turned into bubbles. Therefore, how to inject taxpayers' money into the "right and appropriate place" would call for supervisors to mull over repeatedly.
Furthermore, panic-stricken Europeans are startled to encounter a comeback of "two specters"in sight, namely, an economic recession and high unemployment. Gross domestic product (GDP) growth in the 15-nation eurozone was predicted at 0.2 percent in the next year, according to a latest forecast made by the international monetary fund (IMF). Meanwhile, the unemployment rate has risen rapidly to seven percent in such leading EU nations as Germany, France, Italy, Span and Ireland. Central and Eastern EU member nations, which had drawn up the EU economic growth, begin to bog down in an impasse, and Hungary has appealed for IMF for an emergency aid. And it is a real question as when the vital market confidence would be truly resumed and restored.
As for the aspiration to set up a global monetary system, it could meet with a firm, head-on U.S. resistance. By relying merely on its own strength, EU cannot be too optimistic to vie with the U.S. to see which is much more stronger financially. So, Europeans have an ample reason to be skeptical if "Super Sarko's plans" would come to an end anticlimactically.
By People's Daily Online
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