Saturday, March 14, 2009

The FT Is Not Amused

The Financial Times has taken to referring to the G20 as "the gap of 20" owing to the stark difference between the US and European positions. Witness this characterization of the European reaction to American proposals:

With the crotchety air of a dowager duchess sending a sub-standard amuse-bouche back to the kitchens, Jean-Claude Juncker, Luxembourg prime minister and chair of the “eurogroup” of finance ministers from the single currency zone, added sniffily: “The 16 finance ministers agreed that recent American appeals insisting Europeans make an added budgetary effort were not to our liking.”

And the American stock market hasn't helped: the ten-percent rise in the Dow this past week can only fuel European suspicions that they're being hustled yet again by city-slickers (or should that be Citi-slickers?). Meanwhile, the Europeans seem to have "coordinated" on the one thing that won't cost them a dime, namely, regulation of errant financiers, especially those domiciled in "neoliberal" countries. The animus is so fierce that it's brought even Merkel and Sarkozy together:

Bashing unregulated financial capitalism in general and hedge funds in particular is sufficiently popular in continental Europe that this call even overcame the habitual froideur between Angela Merkel, Mr Steinbrück’s boss, and Nicolas Sarkozy, the French president. Later in the week, the two of them joined forces to argue that more rules rather than an open cheque book would be the way out of the financial crisis. Asked about the US push for stimulus, Ms Merkel pointedly responded: “This is the reason why we decided to speak with one voice today.”

Which is not to say that the financiers don't fully deserve the bashing. But when the pummeling falls incessantly on the "usual suspects," one begins to wonder who's escaping out the back door under cover of the fisticuffs:

One finance official characterises this attitude as akin to that of a pugilist in a bar brawl. “You wait until a fight breaks out and then take a swing at the guy you have always wanted to hit,” the official says. “Whether or not he had anything to do with starting the fight is not the point.”

So, that, dear readers is the current state of play in the staid chambers of international financial diplomacy at the moment: brawling wherever finance ministers gather, quiet in the streets (unless you happen to be in Iceland, Latvia, Hungary, Greece, Guadeloupe, etc.). Soon it may be the reverse.

1 comment:

Tom Holzman said...

Paul Krugman piles on: