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The deficits of the EU financial reforms, by SOMO
Almost one year after financial market turmoil triggered
a financial and economic crisis in the countries of the
European Union (EU), many reforms of the financial sector
are still not in place and destabilising practices are continuing.
Political agreements at several high-level international and
European meetings still need to become legally binding
through EU directives and the subsequent incorporation
into national laws. Will the financial sector reforms currently
proposed at the EU level guarantee financial stability and
protect the real economy from financial speculators?
More importantly, will they create financial instruments at
the service of the public interest and sustainable societies,
and tackle the systemic causes that also are related to
the food, environmental and poverty crisis?
The economic crisis and the reform of financial markets
Jesús Caldera - Stephany Griffith-Jones - Jeffrey Sachs -André Sapir - Nicholas Stern - Joseph Stiglitz
There is wide consensus today on the need to reform international financial markets. The financial sector has been the main factor leading to the current global economic crisis, which originated in the US financial system, to later spread across countries worldwide, finally turning into a crisis of the real economy, with a particular negative impact on Europe.
Governments of developed countries have made significant fiscal efforts between 2007 and 2010 to preserve their financial systems, avoiding bankruptcies and thus a general economic collapse. At the same time, fiscal stimulus plans had been put in place to restore aggregate demand, which fell drastically as a consequence of the lack of confidence and the dysfunctional activity of credit markets.