Greetings and Good Day,
“Transforming a major liability into a big opportunity is a creative art, that needs fine knowledge and ability in performance”
While important journalists, writers, analysts and executives are deployed with deep approach to current global economic crisis, there is no doubt that not even one common denominator emerged on how to address in a methodic way the challenge ahead.
If it is true that the G-20 dedicated energy to this matter, as much as central bankers and international institutions are looking into exits, it is also true that none managed so far to offer a breakthrough and assure the markets with credible solutions.
An editorial on the NYT on Sunday, invited US leaders to meet at Camp David until an American solution is introduced to long lasting problems affecting the US economy. This will enable the US to play its leading role in world affairs, set an example, and provide a solution to the debt, job market, house loans and startups.
Unfortunately we are running almost in the election year and I don’t see this excellent idea feasible.
By contrast Japanese and Chinese state agencies are showing no interest to get involved seriously in this Atlantic affair, hence policy makers are dubious how to proceed.
I will start by the principles and consider that there are three different aspects in the current crisis, one is American, the second European and the third can be called the rest of the world.
We know also that it is clear that these initiatives will not be sufficient to confront the downturn alone. From here fiscal reforms, social security cuts, military expenses innovation, reschedule of house debts, regulation holiday for startups and existing firms, plus a further selective stimulus, are needed to distance the nation from recession.
On the European versant the German efforts are to be admired, especially that the consumer confidence is still resisting, however to be honest this country alone will not make it solo to salvage the PIIGSB.
What remains is the rest of the world and here chaos is supreme, as each and everyone is seeking refuge, for instance the Swiss decision to impede the Euro to go beyond 1.2 or another figure to be decided ahead.
Setting first things first I see that the area where something can be done urgently and effectively for the sake of everyone is Europe.
But what ?
The idea derives from energy and from observing the gas diplomacy between Germany and Russia.
I think that leaders in both countries are willing to explore a common way how to generate an innovative approach in Europe before their own elections next year, expanding responsible Russian role in cooperation with an economy that is driving in pole position the Germans.
While we know that the European Fund will be enacted soon and play a role of treasury, we know also that without the inclusion of further partners it is unlikely that the Fund will succeed to relieve present PIIGSB hindrances. Therefore I recommend a German/Russian/European entente to widen the gas cooperation into monetary stimulus and grants, and bring closer Russia to Europe.
This step which will increase world security, global peace and melt the Euro with the Ruble, will be extremely effective and bridge a balancing act between international chancelleries.
Russian and German dynamism can follow up with Turkey mainly and the duo Egypt / Saudi Arabia, to ensure the Syrian people will have reforms and a new government from one side, and the Iranian nuclear file to be only for civil usage from another.
Will the Europeans succeed for once where the Americans are lagging?
“The difficulties are enormous, but this is where leadership is expected to act”
- Russia’s finance minister rebels over Putin plan – Reuters (news.google.com)
- European antitrust probe launched into big banks in the online payments market (thenextweb.com)
- Medvedev’s Economic Reforms Likely to Continue Under Putin (nytimes.com)
- ‘We will respond just like during the last crisis’ (rt.com)
- Putin Must Overhaul Economy or Risk Brezhnev-Era Stagnation (businessweek.com)
- Putin Seeks Russian Presidency, Eyes Job Swap With Medvedev (businessweek.com)