Spending push to fix crisis causes rift
TEXT OF STORY
Kai Ryssdal: Finance ministers from around the world will meet in London this coming weekend to talk about the global economy. They do that from time to time even when there isn’t a crisis. But this time they’ll be trying to iron out their differences ahead of a major meeting — also in the British capital next month. Their bosses, that would be the leaders of what’s called the “Group of Twenty” advanced and developing nations are going to try to come up with a global approach to the current crisis. But with less than four weeks to go, Marketplace’s Stephen Beard reports that even the closest allies can’t seem to agree.
STEPHEN BEARD: President Obama will use the London Summit to call for a big global increase in government spending. And he’ll aim that message squarely at the Europeans, says Nariman Behravesh of IHS Global Insight.
NARIMAN BEHRAVESH: I think the U.S. is somewhat concerned that the fiscal stimulus coming out of Europe is nowhere near enough to counteract this very deep recession.
The U.S. reckons that it’s pumping — proportionately — four times more money into the American economy than the Europeans are pumping into theirs. Analyst Graham Mather says: blame Germany. The continent’s biggest and richest country has blocked any plans for a massive, Europe-wide stimulus package.
GRAHAM MATHER: Germany is particularly worried about ending up as the guarantor of other European countries, having German taxpayers pay for every bail out.
The Germans — and the French — blame the crisis on what they call the “excesses of Anglo-American capitalism.” They will use the London summit to call for tighter controls. Katynka Barysch of the Centre for European reform…
KATYNKA BARYSCH: Now they’re calling for regulation of hedge funds and tax havens and other things. These are things that are not directly responsible for the current crisis. It’s just an immediate, popular and easy thing to do.
The Europeans and the Americans agree on one thing: summit failure could send markets into a tailspin.
In London, this is Stephen Beard for Marketplace.
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