The Hindu Business Line : Europeans are looking for united solutions

The World Food Day was October 16. On this day, it became clear to me, beyond doubt, that the efficacy of self-centeredness within a ‘free market world’ is a universal law favouring the greedy and predatory.

While the entire Horn of Africa, including Ethiopia, Djibouti and parts of Kenya, is gripped by a food crisis with a billion people going hungry, the US was engrossed with the upcoming elections; Europeans were directing their attention to the turmoil in the financial sector and the rest of the developing world was glued to their television sets, trying to figure out what was happening.

Countries which pledged to give more than €8 billion to address the global food emergency, have sent less than €1billion to meet the catastrophe. Some tens of million people are sure to die of starvation before Christmas this year.

Confrontationist Politics

While now is the time for citizens of the world to connect those dots, come in concert to speak and act with one mind, some entirely conflicting reports in the Indian press caught my attention.

The Prime Minister, Dr Manmohan Singh, has indicated that the Indian economy may be heading for a slowdown. But, the Finance Minister, Mr P. Chidambaram, held the view that there is no cause for alarm.

The BSP Chief, Ms Mayawati, prevented the UPA Chairperson, Ms Sonia Gandhi, from visiting her constituency in UP to meet her people. And, on the opening day of Parliament, L. K. Advani walked up to Sonia Gandhi to greet her and had a brief chat. I wish they did that, more often. Does adversity make ‘strange bedfellows’? Or, is it the beginning of the end of hostile, confrontationist politics, in India?

Unity in Diversity

In contrast, take Europe and we see good citizenry and a strong unity in the enormous diversity of culture, language, thinking, beliefs and mindsets. Last week, the European Union leaders, which included some of the most vociferous opposition leaders, went home from a meeting, that saw harmony and unanimity in putting in place the global financial system. European governments intend to implement the plan quickly. The 27-nation EU endorsed a trillion-euros initiative by the 15 members to rescue banks brought to their knees by the financial crisis.

But, they went further, pressing for a root-and-branch reorganisation of global finance they say is essential to drawing a line under the unregulated immoderation of the past to thwart another crisis. As long as the crisis of confidence continues to fluster the financial world, the peril of the next billion-euro drama happening at any time will remain. Europe has taken the strong united position that it is no longer sufficient to chaotically throw up some scaffolding on a case to case basis. Europeans are looking for united solutions.

Europeans agree that the globe will never be the same again and, that the US has lost its status as the superpower of the global financial system. Perhaps Europe’s lately found buoyancy will put it on the path to global supremacy.

Washington Dragged Europe

The majority of Europe agree that the Bush administration bungled Wall Street, and that its rejection to adopt stricter regulations led to the current crisis. Germans believe that American ‘pigheadedness’ had dragged other industrial nations into the credit crisis. Many European countries had already imposed stringent conditions on their banking sectors.

Most European nations dutifully adopted an EU directive into national law, and had to deal with numerous complaints from small- and medium-sized companies in doing so. Much of the EU has signed up to Basel II, and Germany codified it in 2007. But, Washington still hasn’t set a date for working its principles into American law. Europe is demanding greater transparency and clearer regulations on the financial markets so that a crisis like the current one cannot be repeated.

Laughing Stock

When Bush stepped onto the stage for the eighth time at the United Nations General Assembly three weeks ago, he talked about terrorism and terrorist regimes, and about governments that allegedly support terror.

The US President gave a speech analogous to the ones he gave in 2004 and 2007, mentioning the word “terror” 30 times in 22 minutes. At the 63rd General Assembly of the United Nations, George W. Bush was the only one still talking about terror and not about the topic that currently has the rest of the world’s attention. Europeans see on display the end of arrogance. They feel Americans are now paying the price for their conceit.

Dominant Role Lost

Far too long, the Americans and the British made shaggy dog story of the conservative Germans for their risk-averse, savings-oriented mentality. In the German eye, the crisis comes as a “purifying storm.” And now, the relative conservatism that Germans have shown in financial matters is paying off. Indeed, one can see that Germany and rest of Europe are on a more solid base.

Over-confidence, bluff and arrogance have proved an almost fatal cocktail for America. The benefits of Bush-bashing even produced an American Nobel Laureate in Paul Krugman who said: “I’ll be enormously relieved when this guy (George Bush) is no longer sitting in the White House”.

In Cologne University where I am a guest faculty, my students had a lively debate on the global financial crisis. Amid the consensus points was the disquieting suggestion to “impose oil and trade sanctions on America”.

“For the next ten years, Americans must live on peanut butter, cornmeal, breads and porridges” the management students said. Too much has gone wrong with America. Perhaps, it must press “re-set”, change around, and start all over again.

(The author is former Europe Director, CII, and lives in Cologne, Germany. blfeedback@thehindu.co.in)

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