Europeans Deal With Global Economic Slowdown
RENEE MONTAGNE, host:
With America's stature taking a battering because of the economic crisis, Europe is determined to put its own stamp on a new financial world order. Eleanor Beardsley sends this report on how Europeans are dealing with the economic slow down.
ELEANOR BEARDSLEY: Tempers are flaring across Europe as the recession eats its way through European jobs. In France, there are now more than two million unemployed with 100,000 more joining their ranks every month. This has led to a few desperate acts.
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Unidentified Woman: (French spoken)
BEARDSLEY: That's a television news report about the CEO of U.S. company 3M, who was held hostage for two days in his office in a provincial French town after the company announced layoffs. The head of Sony France was also briefly kidnapped this month by angry workers who are losing their jobs.
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BEARDSLEY: And workers laid off by a German tire manufacturer in eastern France brought their protest to the capital last week, demonstrating and burning tires in the center of Paris.
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BEARDSLEY: European leaders are under enormous pressure to stop the job losses, but they feel huge stimulus packages would lead to inflation, not world economic recovery. Over the weekend, German Chancellor Angela Merkel said: I will not let anyone tell me that we must spend more money.
Europeans say they are already spending on social safety nets that help buffer their populations from the crisis. They say these systems also have a stimulating effect on the economy.
Jacques Mistral is an economist at the French Institute for International Relations.
Mr. JACQUES MISTRAL (Economist, French Institute for International Relations): European wage earners are not frightened by the danger of losing suddenly their homes as they are in the U.S. French workers, even if they are fired, do not lose their health protection. And nowhere in Europe is retirement pensions in danger. So that makes a huge difference.
BEARDSLEY: Despite his personal popularity, President Obama is likely to encounter deep resistance to U.S. economic prescriptions and the American style freewheeling capitalism. Despite some internal differences, European leaders are more interested in the reform and regulation of financial markets. Markus Kerber, professor of Finance of Berlin Technical University says outrage has brought Europeans together.
Professor MARKUS KERBER (Finance, Berlin Technical University): The crisis has come from America, due to an American financial system under (unintelligible), under regulated, with gangs of pirates greedy for huge margins of profits creating bankruptcies beyond our imagination. And that's why in Europe, as a common denominator, that the American aspects of the crisis must be solved by American money.
BEARDSLEY: Many here feel the U.S. is no longer in any position to dictate other countries what types of economic policies to pursue. And U.S. officials are said to be downplaying the fiscal stimulus targets they were pushing earlier. They are now focusing more on European priorities, like new rules to restrict tax havens, regulate hedge funds and coordinate international financial regulation.
Unidentified Man: (French spoken)
Unidentified Group: (French spoken)
BEARDSLEY: Over the weekend, tens of thousands of protesters took to the streets in several European capitals to send a message to G-20 leaders. They called for fairer systems that protect jobs and reduce poverty. The International Monetary Fund may be the big winner of the summit. Both the U.S. and Europe agree on strengthening its role to help developing countries through the crisis. There is talk of tripling the IMF's funding.
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BEARDSLEY: In a sign of the times, IMF head Dominique Strauss-Kahn made a guest appearance on a popular French TV show where politicians face off live with ordinary citizens. Strauss-Kahn told his audience that while the crisis might be ruining their vacations, in the developing world, it's a matter of life and death.
Mr. DOMINIQUE STRAUSS-KAHN (Managing Director, International Monetary Fund) (Through translator): Three million more children will die between now and 2015 if we don't come out of this crisis soon. At the G-20, I will be speaking for the poorest countries and make sure the richest ones keep their promises.
BEARDSLEY: But amidst all the talk of where Europe and the U.S. differ, there is one big similarity in American and European attitudes toward the crisis. Just like in the U.S., Europeans have reacted with fury to reports of executives of failing companies receiving massive bonuses and golden parachutes. Taking the lead, this week President Nicholas Sarkozy issued a presidential decree banning the practice in French companies receiving state bailouts.
For NPR News, I'm Eleanor Beardsley in Paris.