Which European Response to the Financial Crisis?
By Guido Montani
The reaction of the European Union to the financial crisis consisted mainly in uncoordinated national plans. A real European recovery plan would have been more effective, but it was not possible because the EU has not a federal budget and a federal government. There are some European public goods – such as monetary and financial stability – which must be supported, in the last resort, by European resources. If the European Union cannot count on its own resources, the stronger States of the Union will be obliged to carry out the role of “lenders of last resort”. Moreover, the EU needs a federal government to speak, on equal terms, with the other continental powers. In this essay, it is suggested that the EU should propose to build a “world eco-monetary union” – reforming the IMF in order to substitute the dollar as a reserve currency with the SDRs – to guarantee monetary and financial stability and a sustainable development for the global economy. Read the essay
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Comments
It is important that a real recovery plan must be implemented to provide monetary and financial stability and also a sustainable development for the European and the global economy. The time to act is now and the time to find solutions to the crisis is today and not tomorrow.
This is Good that Wall Street heads for big decline as recession fears stir panic. In order to get out of an recession is to allow the markets around the world to go under and let Inflation increase as far as it can go. Once the world is in a tailspin, like the depression of the '30's, a world war is needed to revive the global economy. This is how jobs are produced and people will have money to spend, the markets will begin to improve.