Europe needs to get back to the grassroots of its market economy and base its economic growth on savings and productivity. EU governments should be careful about the future effects of their actions. By lowering interest rates and injecting money into the economy, governments can, to some extent, tackle current problems, yet in long term these actions can have the negative effect of risking high inflation, heavy debt servicing cost and therefore substantially increased taxes. What we need is to recreate the sort of institutional framework that will ensure confidence in the system. Markets have to be based on principles of transparency and have a regulatory framework that is understood by all. Instead of being at the heart of the economy, the financial sector ought to be ancillary to the real economy. This crisis may yet turn out to have a beneficial side, in that it makes us understand that a business may be worth more than the price of its stock. We have to encourage a new philosophy of financial rewards that is not based on short-term gain but on sustained growth and long-term contributions to the economy.
The fourteenth edition of Europe's World is out. We feel it's fair to say that few if any publications in the field of international relations and policy debate have grown as fast or widened their scope so remarkably as Europe's World. Table of contents of Issue 14.
The search is on for 'global governance' solutions to the world's economic and political problems. The trouble is, of course, that there's not much agreement across Europe or around the world on what sort of policy instruments, institutions and rules would open the way to a fairer international system serving the needs of North and South, East and West while avoiding the pitfalls that led to the global crisis. Read more
IS HOME-GROWN TERRORISM A FAILURE OF INTEGRATION POLICIES OR THE SYMPTOM OF A WIDER CRISIS?
What do YOU think?