European inaction
Andrew Neil 8:35am
Consider the response of America and Europe to the current financial turmoil. In Washington, the US Federal Reserve slashes interest rates by 75 basis points and the Bush administration proposes a $150bn stimulus package of tax cuts, which will probably win bipartisan support in Congress.
Back on this side of the Atlantic, Gordon Brown summons the leaders of France, Germany and Italy (plus the boss of the European Commission) to a meeting in 10 Downing Street. After an afternoon of deliberations, the British Prime Minister emerges to mouth all his usual cliches about stability, transparency and co-operation. Not a single measure that will make a blind bit of difference to the current economic slowdown that will blight Britain and continental Europe this year.
Meanwhile, the Bank of England and the European Central Bank indicate that we can expect only modest cuts in interest rates, one small step at a time, largely because both are more worried about inflation than recession.
The bottom line? America has taken major fiscal and monetary steps to reduce the risk of recession in 2008. Europe has done next to nothing on both fronts.
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Comments
richard jacobs
January 30th, 2008 9:24amHole in one
simon
January 30th, 2008 9:44amGood stuff from the lone voice of common sense on the BBC
David Parker
January 30th, 2008 12:22pmBy EU past performance this comes as no surprise. With their financial acumen will probably end up with simultaneous recession and inflation.
Shaun
January 30th, 2008 3:46pmWhat sort of stimulus package could the EU enact? It doesn't have the capability to present an EU-wide recession and that's not its job. It doesn't levy taxes so how can it cut taxes. However, individual member states will no doubt respond in their own ways with their own versions of stimulus packages. Which is, surely, how it should be. I also think preventing inflation is a better remit for central bankers than promoting growth. And I thought that the ECB was specifically told that; I believe it was modelled on the Bundesbank and set up to be resistant to political pressure, while the French pushed for the opposite model.
J H Holloway
January 30th, 2008 4:39pmShaun's defence of the EU shows just how much cobblers is talked about the capabilities of this creation. All the disadvantages of increasing beaurcratic centralisation, but when it comes to the crunch, unable to do anything useful.
Joey H
January 30th, 2008 6:47pmAndrew, more of these blasts of sense please! Not all of us can bunk off work to watch Daily Politics in daytime...
TGF UKIP
January 30th, 2008 7:50pmFine eurosceptic common sense but Andrew, while Daily Politics is excellent when are the BBC going to give you a programme worth watching on a Thursday night. A genuinely conservative (and preferably provincial) presence instead of a pair of metropolitan lefties would help and, of course, a new producer.
Arthur
January 30th, 2008 9:15pmI'm all for Europe, but not for the EU in its current undemocratic and non-transparent condition. In this respect, the mistake Brussels bureaucrats have made is to assume for the sake of (their own cocktail party) convenience that the EU as an institution is synonymous with a living, flesh-and-blood Europe. The same illusion has led many of them to treat European electorates with unseemly contempt. Nevertheless, it would be wrong of us in the EU to believe that they, or indeed national governments, can do all that much about economies committed, albeit in varying degrees (unevolved CAP is still around), to open markets, other than - you guessed it - adjust interest rates. More broadly, maybe it's time for us to hand out another yellow card (Dutch citizen here who voted "No" even while aware that it was about streamlining an EU admin issue - Just admin? I rest my case). Maybe it's even time for us to resurrect an old American argument: "No taxation without representation." Goodnight guys. Unlike the Brussels clique, I have a real job to go to tomorrow.
Gordon Brown
January 30th, 2008 10:26pmI thought it was a good meeting, I will dither for a few more days then decide once the recession starts.