The Group of 20 Summit in Toronto has confirmed the different positions in relation to the crisis and its developments between the US and the European Union. These differences concern different aspects: the new financial regulation as well as the relation between the budget deficit and the need to sustain the growth, dealing with the mass unemployment. In a certain sense both the policies look, for different reasons, not adequate to deal with the economic and social consequences of the current crisis. In this framework it is important to compare the different perspectives.
The finance. Concerning the banks’ controversial regulation it is worth to reminder that one of the first measures of Franklin Roosevelt, in the spring of 1933, was the fundamental Glass-Steagall Act, aimed to separating investment and wholesale banking. In the current crisis, after a long debate, US Congress has set the Dodd-Frank bill. Does it go towards effective changes that can prevent new crises?
The ECB.On the European side, the last monthly bulletin of the ECB (June 2010) states that the financial measures aimed at fiscal consolidation are the cause of lower growth and social hardship in the short and medium term, but, at the same time, they are necessary condition to re-create sustained and stable long-term growth. The experiences of countries like Ireland, Finland, the Netherlands seems to support this thesis. The ECB's view is also shared by the European Commission. What assessment can be given from an European and/or US point of view?
Meanwhile, the policy of Barack Obama, formally aimed at supporting recovery, is in the US a controversial issue. Opinions are divided. On the one hand, it is considered a mistake to underestimate the deficit. On the other hand, the weakness of public policy, taking into account unemployment level, is strongly criticized.
The Euro. As the Eurozone, a wide debate about the fate of the euro is open. For some commentators, there are structural differences inside the area that in the wake of the crisis will inevitably lead to separation between the strong euro area around Germany and other countries that will leave it. What are the chances that the strong euro countries leave the euro? On the other hand, is it realistic to imagine a new transfer of national sovereignty to the EU central authorities?
Insight has gathered a number of first comments in regard to the different issues which are crucial in the current debate: such as the contradictions between the huge fiscal restraint and the growth, the economic and social European flawed economic and social policies and the failure in the attempt to implement an EU governance. Other contributes aim to a specific analysis of the crisis concerning the Spain case.
The following are the first articles, comments and Papers collected by Insight
Jeff Faux Unsolved problems in the US policy [3]
Jesper Jespersen 'New Economic Thinking' and the governance of Europe [4]
Antonio Lettieri The crisis and the trick of the European structural reforms [5]
Marcello Colitti The Banks and the Governments [6]
Ruggero Paladini The deceptive European fiscal policy [7]
Joan Coscubiela La teología de la desregulación [8]
James K. Galbraith Statement to the Commission on Deficit Reduction [9]
Lawerence Mishell Policy responses to long-term unemployment [10] - (Testimony given in a hearing before the Committee on Ways and Means)
Italiano [2]