Ahead Of G-20, Europe Rebuffs Stimulus Spending
LIANE HANSEN, Host:
Over the weekend, crowds took to the streets in several European cities. They wanted to send a message to world leaders who get together this coming week in London to come up with a global plan to end the economic crisis. Europeans are being hit hard by the downturn and say this time they want real changes in the way the world's financial systems work. Eleanor Beardsley has this report from Paris.
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ELEANOR BEARDSLEY: Over the weekend, the demonstrators took to the streets in Rome, Berlin, Paris and London.
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BEARDSLEY: These protestors gathering in front of the Paris stock exchange chanted that workers shouldn't have to pay for the mistakes of bankers. In London, 15,000 people, families and ordinary citizens, marched through the city with messages for world leaders printed on banners. The demonstration was organized by a coalition of charities called Put People First. The group plans to march every day leading up to the G20 meeting on Thursday. It is demanding that leaders take action on job losses, poverty and climate change. Nicholas Barett(ph)of London was part of the group.
NICHOLAS BARETT: People are angry. They're angry at the spiraling inequality. They're angry that this is a recession made by other people. But the people who are paying the price for it are the millions of ordinary people whose jobs are at risk.
BEARDSLEY: Even more than in the U.S., there is a sense of unfairness to the crisis in Europe. After all, Europeans argue it was America with its greed, debt and poorly regulated financial system that got the world into this mess. There is a unanimous call here for strict new rules to oversee world financial markets with the understanding that one country can no longer be in charge. Speaking on French radio, Luxembourg's Prime Minister Jean-Claude Juncker, who is also a leader of European finance ministers, said what occurred should never be able to happen again.
JEAN: (Through translator) We have to come out of the G20 with very clear rules that apply to everyone. No financial product, no financial operator and no financial exchange should be able to operate without control and supervision.
BEARDSLEY: There are signs of desperation as the recession eats its way through jobs across the continent. In France, both the CEO's of Sony and 3M were temporarily kidnapped by angry workers after the companies announced plant closings. But European leaders are rejecting giant stimulus spending plans like President Obama's. They say they are already forking over huge sums for social welfare systems that have their own stimulating effect. Markus Kerber is a professor of finance at the Technology University of Berlin. He says throwing massive sums of money at the crisis is not the answer.
MARKUS KERBER: The crisis in the United States has come from not a lack of liquidity, but an abundant liquidity by a policy of cheap money.
BEARDSLEY: Kerber says Germany and other countries feel overblown government spending could lay the groundwork for a future crisis.
KERBER: Now we have, really, a return to Keynesian policies, and I fear that sooner or later, we're all going to pay this with a rate of inflation, which is beyond our dreams. It might turn out to be a nightmare.
BEARDSLEY: Kerber says it is admirable that world leaders are coming together for next week's G20 meeting, in spite of the intense political pressure each feels at home. But with divisions between the world's largest economies in Europe and America growing, he says he'll be surprised if they come up with an effective action plan. For NPR News, I'm Eleanor Beardsley in Paris.
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