Main focus of Monday, November 3, 2008

Answers to the financial crisis

The states of Europe are seeking to answer the financial crisis with national economic programmes and reform plans. Whether in the form of subsidies for key industries or state funds, aid is the order of the day. And if the financial crisis is met in the right way, writes the European press, it could even present an opportunity.

Süddeutsche Zeitung - Germany

The daily Süddeutsche Zeitung argues in favour of comprehensive subsidies for the ailing auto industry. "Hardly any other industry is as globalised as the car industry. ... Now we are facing a financial crisis, and companies that compete internationally are receiving state subsidies. This is the strategy that has been decided in America and the same will no doubt be done here in Europe and Germany. We have been taught that subsidies are a bad thing because they disrupt the free play between supply and demand. ... Admittedly, this free market exists only in theory. The Japanese are taking brutal measures to protect their car business. And it is not only in Eastern Europe that governments provide huge incentives for companies wanting to open new plants there. In Germany, too, the state gives a helping hand, albeit a little more discreetly: here government money is invested in research and development. ... The goal must be for all companies to get the same aid - immediately, for a fixed period of time and, if possible, worldwide." (03/11/2008)

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The Times - United Kingdom

The Times argues in favour of sovereign wealth funds, which are injecting badly needed funds into Western businesses. "The cross-border investments of these funds generate political controversy in developed economies. ... [The French] President [Nicolas] Sarkozy has vowed to protect French companies in the face of what he calls 'extremely aggressive sovereign funds which only follow economic logic'. By contrast, [the British Business Secretary] Lord [Peter] Mandelson declares that Europe should not discourage investment, and that London would provide a good home for the European operations of sovereign funds. ... Western governments are entitled to expect transparency in the way that sovereign funds invest their holdings of international reserves. But this requirement should not be a cover for protectionism. ... Investors with long-term horizons are conspicuous by their scarcity in today's financial markets. They ought to be welcomed." (03/11/2008)

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Polska - Poland

In the daily Polska, Polish sociologist Jadwiga Staniszkis casts the financial crisis as an opportunity for Poland: "The crisis not only will not destroy Poland's chances of modernising, it could actually provide the opportunity for this change. Naturally this depends on the strategy used to face the crisis. In the moment a crisis emerges, for example, it may be that what had previously been perceived as a setback turns out to be a valuable reserve. Take a look at the Chinese: because of the crisis they have started a series of reforms that will facilitate the trading of rights for the use of land and property. This means that all of a sudden over 730 million potential borrowers are on the market. That gives the economy a tremendous boost. And here in Poland the crisis has created a situation in which it is easier to push through difficult and hitherto unpopular social reforms - I'm thinking here of interim pensions ... and also the conversion from the zloty to the euro." (03/11/2008)

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Les Echos - France

The French business paper Les Echos analyses Russia's action plan for the crisis: "The Russia of Vladimir Putin is also affected by the crisis, and here the cards are being shuffled and dealt in a new, Russian way. We are now witness to a new round of nationalisations and privatisations, the fourth since the fall of the USSR. What is at stake is control of the world's most important firms in the area of strategic raw materials: oil, gas, steel, diamonds, nickel, gold and precious metals. ... First of all the regime will probably try to help the energy companies, because it is convinced that control of oil and gas supplies to Europe is the key to a new and grand national policy. ... The new deal could be even bigger than the three previous privatisation waves. ... And if you recall earlier times, there should be no shortage of bloody intrigues. But apart from a few exceptions, Western firms are apparently not invited." (03/11/2008)

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