Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-11-18-Speech-2-294"
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"en.20081118.29.2-294"2
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"Madam President, 2009 will go down in history as the year of the second great global economic depression.
In his book on the 1929 crisis, John Kenneth Galbraith wrote, and I quote: ‘The singular feature of the great crash of 1929 was that the worst continued to worsen’. The subprime mortgage crisis has triggered a deflationary spiral which is not only ravaging the financial system, having wiped out more than 60% of the global value of shares.
This liquidity and solvency crisis is increasingly affecting the real economy too. The term ‘real economy’, as opposed to the financial sector, is interesting. It emphasises the virtual nature of most financial assets. In the wake of the debacle in the financial markets, we are experiencing the great resurgence of national governments. We have seen a succession of summits. The Washington summit produced an impressive catalogue of commendable intentions. With the gift of hindsight that characterises the leaders, great and small, who govern us, vigorous measures have been prepared with a view to assessing risks properly and avoiding excessive leverage effects. Supervision is to become more effective without stifling innovation. ‘Hear! Hear!’ we say, while awaiting details of an appropriate system of regulation that will avoid any excessive risks without falling into the trap of overregulation.
The return of national governments to the role of market regulators has to be welcomed, but the unfortunate thing is that this often means the return of the self-seeking nation state.
In a more open world than that of 1929, any national action will quickly run out of steam. The recession calls for action in a spirit of international solidarity. The European Union must mobilise all its forces, pool all available national budgetary resources to invest them as a matter of priority in infrastructure for growth and bolster purchasing power.
President-elect Barack Obama is said to have the intention of launching an economic recovery programme costing the equivalent of four per cent of US GDP. The 27 Member States of the Union, which are collectively less indebted than the United States, should make a similar effort in order to pull Europe and the world out of a financial crisis that threatens to bring distress to everyone."@en1
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