Suchergebnisse

The sovereign debt crisis originating in the eurozone
immediately after the eruption of the global financial crash represents
a significant challenge not only for the European but also for the world
economy. Overcoming it will contribute to creating the conditions for
sustained global economic recovery and also provide a testing ground for
our capabilities to control the dangers surrounding the globalisation
process which is unfolding over the recent decades. The integration of
markets in products and finance, and less so in services, coupled with
enormous technological progress in communications and transport diffused
growth to regions and continents that, during the last centuries, had
been left behind the dramatic rise in living standards witnessed in
Europe, North America and Japan since the Industrial Revolution. The
opening up of markets led to more efficient use of global resources
allowing productivity to grow while billions of people transgressed
poverty lines and joined the modern world. The downside of this process
is that national control over economic policy has been significantly
diminished, even vanished for small economies, while intricate problems
emerged for international economic governance. These problems were
brought to the fore during the recent crisis at the global and eurozone
level. As markets integrate and systems converge, controlling imbalances
in either the real economy or the financial sector becomes increasingly
difficult since it requires much more advanced policy cooperation than
allowed for in institutional set-ups corresponding to nation-centred
economic models. The extent of the changes that are needed will become
clearer as we review the origins of the present crisis. At the global
level the huge current account imbalances that have been built up over
the last decades produced an unusual pattern of savings flows. Poor
countries, chiefly China, have been financing rich ones, such as the
United States. This pattern reflects the fact that emerging countries
have had large current account surpluses, whereas developed economies
have accumulated sizeable deficits. The imbalances led capital to flow
'the wrong way' from the developing to the advanced economies,
destabilising the financial system and thus creating the conditions for
the economic crisis.