Thursday 12 March 2009

Cheerful prospects

"Some observers, such as Emmanuel Todd, a French sociologist, are predicting the end of democracy, or at least its significant erosion, as populist rightwing leaders including Silvio Berlusconi, Italy’s prime minister, and French President Nicolas Sarkozy become increasingly demagogic and authoritarian. Others forecast a reversion to nationalism and protectionism as countries abandon the European ideal and look to defend their own.
In this view, the EU may increasingly be seen as part of the problem rather than the solution, the “Trojan horse of globalisation” in the words of Mr Sarkozy. Along with other national leaders, he has been spearheading the response to the crisis, leaving Brussels bureaucrats to fret about infringements to state aid and competition rules and the trashing of the eurozone’s fiscal rules."

Financial Times: Agitation as middle-class Europe struggles to cope, March 11, 2009
The Financial Times now has a section called "The Future of Capitalism". I just fought my way through a very interesting SWP-paper titled "Globale Ordnungspolitik am Scheideweg", more than 100 pages long and focusing on how the crisis affects some countries (US, European Union, China, India, Russia, Brasil, Mexico, the Gulf States, South Africa) and on some policy fields that might be essential (a new financial system, energy, the prospect of a food crisis especially in Africa, climate change). I highly recommend it, but it's in German.
One of the main points of the paper is that the countries least hit by the crisis (especially China) are in that position because there economy is mostly dependent on their home market, the banks have a legal obligation to a high rate of capital resources (Eigenkapital?), diverse exports and not just raw materials (which is Russia's problem), a small number of foreign capital credits and they were not involved in the financial schemes and the US housing market.

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