European inaction and risk of deepening crisis

The current economic and financial crisis has shown much of their impact and indicates a rather bleak future. Much of its causes have been identified and several plans so that there is an attempt to decrease its negative impacts have been designed. The big question is whether all governments are effectively prepared to work with the depth and the necessary scale. Apparently no.

While Barack Obama has struggled to approve plans and resources seeking to restructure and / or revive the US economy, other countries live a moment of political vacuum. Countries like Brazil, for example, They prefer to defend more rhetorical speeches of responsibility for the crisis - both in terms of guilt, as conditions to solve -, than actually act; something expected of an economy that has most to lose from the crisis than to contribute to its solution. However, the most serious of all this is when important world economies also lost in rhetorical speeches, as has happened with Europe.

The European Central Bank, contrary to what the Federal Reserve has done, has been slow and not very active in the forwarding planes to make this crisis has a shorter duration or less perennial impact on the mainland economy. The European fiscal policy is, no minimum, pífia able to effectively deal with the crisis and nothing indicates that there will be a space for that to be changed in the short term. There are currently a minimally sound monetary convergence in the context of European integration, But in terms of fiscal policy there is little coordination between the various members of the European Union, creating a vacuum in the joint capacity of some of the key measures that could further actions to reduce the crisis. For now the crisis is perceived more in the US than in Europe due to the strength of the state apparatus of social welfare that prevails in most of the Euro Europe.

Unemployment insurance-hefty, together with the public health basis offered to European makes the crisis did not show as strong in the company's daily lives. The point is that the European states will not be able to maintain this policy for long, calling a time bomb that could be the trigger of a second, deeper phase of the current crisis. European states are borrowing more and more to sustain its social safety net, which makes them heavier and heavier on the economy.

At the same time, a time like this is unlikely to be sufficient political climate to change the current logic, reducing the services provided by the state. Thus, Europe can effectively show the size of your current inaction few months ahead of today, just when they might emerge the first signs of a positive turn for the world economy.

Certainly the United States are perhaps those with the greatest potential to stimulate the resumption of economic growth, But not all the effort they can do will be enough if the European Union continues deepening elements that further hinder the resumption of economic dynamism.

Originally published in FinancialWeb

http://www.financialweb.com.br/blogs/blog.asp?cod=98