TOPOLANEK OFFERS LITTLE ENCOURAGEMENT…. The current recession is, unfortunately, a global phenomenon, and the strength of the European economy matters a great deal to international recovery. Paul Krugman recently explained that the continent has so far failed to “respond effectively” to the financial crisis, adding, “Europe has fallen short in terms of both fiscal and monetary policy: it’s facing at least as severe a slump as the United States, yet it’s doing far less to combat the downturn.”
Making matters worse, we apparently shouldn’t expect too much in the way of leadership from the current E.U. president when it comes to a way forward.
The president of the European Union on Wednesday ripped the Obama administration’s economic policies, calling its deficit spending and bank bailouts “a road to hell.”
The comments by Prime Minister Mirek Topolanek of the Czech Republic, which holds the E.U.’s rotating presidency, startled some U.S. and European officials, who are preparing for President Obama’s visit next month to several European cities, including Prague, the Czech capital.
There are, of course, a few key caveats to all of this. Perhaps most importantly, there’s some question as to whether Mirek Topolanek speaks with any real authority — his government was “toppled by a no-confidence vote by opposition lawmakers in the Czech Parliament” on Tuesday, the day before his rant about economic policy.
What’s more, some European Parliament legislators were quick to rebuke Topolanek’s comments, and Czech officials told reporters his remarks had been translated poorly, and were not as harsh as they may have seemed.
Nevertheless, Topolanek’s tirade reflects a significant difference in the way the United States and many European countries perceive the economic crisis and how to address it. Germany, for example, opposes the idea of investing heavily in stimulus, and other leaders believe they’ve already done enough to respond to the downturn. (Krugman added yesterday, “[T]he utter unwillingness of many European leaders to come to grips with the scale of this crisis is a very real obstacle to action.”)
President Obama will head overseas for a G20 summit next week, and economic recovery is at the top of the to-do list. Should be interesting.