Nicolas Sarkozy, the French president, was therefore right when he appeared to back a €300bn rescue fund. Regular readers of this column will probably recall my somewhat constrained enthusiasm for his economic policies. But this had the makings of a good plan. He ended up distancing himself from it, when it became clear that Angela Merkel, the German chancellor, would not support it. But he was right and she was wrong. Of course, a European plan should not have been a copy of the bail-out that was finally adopted by Congress on Friday. The US plan failed to address the problem of an undercapitalised banking sector. That issue is even more important in Europe where many banks have an extremely weak capital base, with leverage ratios of 50 or more.
Monday, October 6, 2008
Wolfgang Munchau comments on the need for a European bank rescue plan and has praise for Sarkozy:
Nicolas Baverez, the author of La France qui tombe (2003), was once among the leading apostles of a neoliberal cure for all of France's ills. Despite the victory of the candidate who most fully embodied his vision of France's future, Baverez's pessimism has taken a decidedly dark turn. Read the opening paragraphs of his forthcoming En route vers l'inconnu and see if he doesn't remind you of a latter-day Oswald Spengler. The parallel is not really terribly amusing, for if Spengler's theories were wildly wrong in detail, they were alas all too accurate in their general tenor of doom and gloom circa 1930.
FP contributor Éloi Laurent has a new book, co-authored with Jean-Paul Fitoussi, entitled La nouvelle écologie politique: Économie et développement humain. Éloi can also be heard on the France Culture program L'Économie en questions.