Bailout Beat Goes On: Europe Faces Banking Crisis of Its Own

Der Spiegel by Mark Scott | Oct. 7, 2008 (News Analysis)

Perhaps it's time, he and other analysts say, for a more EU-wide approach to solving what is quickly becoming a pan-European problem. But with no central financial regulator in Europe, and a tendency by local politicians to focus on domestic financial and economic issues, any such solution is unlikely soon. The resulting irony could be that even though Old World institutions engaged in less of the risky lending that pulled down so many American ... Full Story »

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Michael Bugeja
3.7
 by Michael Bugeja - Oct. 7, 2008

Der Spiegel is one of the best sources of news in Europe, and like most U.S. reports, this one surveys the experts in a round-up story that gets across these points: 1. There is a banking crisis in Europe. 2. The U.S. bailout can do little good because the issues are different. 3. The European Union has no real federal authority like the United States. 4. Thus, the crisis might be worse. Missing from the report, again like so many in the United States, is the impact on the everyday European and the "big picture," such as the possible devaluation of the Euro and the effect on tourism or other industries, especially when energy costs are anticipated to rise later this winter.

We're headed into a global recession with threat of a worldwide depression. Journalists need to be researching the effects of both on commerce, politics and trade.

That has left governments to tackle the crisis on a country-by-country basis, with sometimes divergent solutions that can even make matters worse for neighboring countries. A weekend meeting in Paris of top European leaders, called by Nicholas Sarkozy, the President of France and current holder of the EU’s six-month rotating presidency, made no evident progress in hammering out a framework for a regional solution.

The European Union needs a crisis clause to extend its six-month rotating presidency, perhaps based on a vote of affirmation by 2/3s of its 27-member states. Six months is not enough time to help resolve crises such as the ones looming in our future, particularly when the EU has a weak central governance framework.

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