Wednesday, July 01, 2009

Tuning up the violins on the Titanic...

Perhaps the title to this post is a bit much, but one of the consistent themes of this blog for the past 2 years is the myriad problems facing the European Union.

And now pragmatic Sweden takes the helm of the EU "Presidency", while the real leaders of the several countries have only just started to realize the gravity of the crisis, and announces it will "fight hard" for a global climate change deal that will have the U.S. and China on board. They had better get back to basics soon or the Euro area will climb to first on my list of potential firebrand areas. Full article here.

Mr Reinfeldt said Europe’s financial sector was to some extent protected by emergency legislation put in place after the crisis touched its peak last September and October. “We are better prepared to deal with the fact that we might get further financial turbulence,” he said.

Nevertheless, his words echo the concerns of EU policymakers and financial specialists in Brussels, who say they doubt the capacity of many European banks to absorb future heavy losses stemming from the Continent’s worst recession in almost 80 years.

Mr Reinfeldt said it was all the more important for EU governments to restore order to their public finances in the post-crisis era because it would not be long before demographic changes – more pensioners and fewer of the population in jobs – started to put immense pressure on Europe’s welfare state.

Mr Reinfeldt, promising Sweden would push as hard as possible during its EU presidency for a global deal on fighting climate change at a Copenhagen conference in December, said he would do his best to persuade the US and China to sign up.

“We can never reach the global answers we need unless China and the US take the decision to do much more,” he said.

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