Quotes

• Joaquín Almunia, European Commissioner for Economic and Monetary Affairs:
  • "How do we plan for the unwinding of the economic recovery plans and withdrawal of the massive support to the banking sector when growth and stability return?"
  • "Thanks to efforts to re-capitalise banks and guarantee credits, no Lehman Brothers has happened in Europe."
  • "The real question now, however, is the following: Where does this massive financial, fiscal and monetary policy effort leave us today?"
  • "The crisis will not be resolved simply by pouring vast amounts of public money into an ailing banking sector. This was the Japanese approach of the early 1990s and it led to a decade of zombie banks, low growth and deflation."
  • "International policymaking no longer concerns a cosy transatlantic club,"
  • "But let's be honest. Although there are signs that the recession is easing, a return to growth is not yet there,"
  • "We cannot anticipate the length of this economic crisis. The crisis is increasing public debt, and that increases the urgency of our task."
  • "Many of the decisions in this challenge remain national. But we need to improve budgetary surveillance on long-term sustainability. This is not just about debts and deficits, but about the quality of our public expenditure, and how it responds to these challenges."
  
  
• Mario Monti, President of Bocconi University and former European Commissioner:
  • "The crisis has exposed the insufficiencies of the present structure of governance of the EU."
  • "If the world economy is in crisis, the market economy is in even bigger crisis (…). The key question for market economies – and even perhaps democracies – is whether they will master the inequalities caused by globalisation."
  • "One result of the crisis was to ‘de-frost’ the differences between international models across countries."
  • "The crisis gives an unexpected political opportunity to meet the social challenges while safeguarding integration (…). The EU should grab this chance for a compromise."
  • "If members continue to cling to tax sovereignty, they will see the continued deterioration in their nominal sovereignty due to tax competition (…). Member States have to realise that each of them is a fiscal paradise relative to other European countries."
  
  
• Marco Buti, Director-General for Economic and Financial Affairs:
  • "Ageing. This is not a diversion. It’s very important that we keep a long-term perspective when we address the policy questions."
  • "We have published our forecast 10 days ago…we are lucky that it hasn’t become outdated already. In the past they became outdated quickly because there was so much bad news in the meantime."
  
  
• Jørgen Elmeskov, OECD:
  • "We have seen some green shoots but one needs to keep things in perspective. One can really talk about recovery only in China and some Asian countries. In the OECD countries one can only talk about a slowdown in contraction."
  • "We seem to be beyond the period where the day after we publish a forecast new skeletons fall out of the cupboard."
  
  
• Reza Moghadam, IMF:
  • "Emerging markets in Europe start from a higher growth profile and their collapse is therefore somewhat more dramatic."
  • "All of this calls for a coordinated multilateral approach. Europe has an excellent framework to provide that approach."
  
  
• Alladin D. Rillo, ASEAN:
  • "East Asia is not immune from the crisis."
  • "The region as a whole has fared much better than other regions of the world, and we have a role to play in the recovery in global output."
  
  
• André Sapir, Université Libre de Bruxelles and Bruegel:
  • "Unified representation in the IMF – at EU or euro area level – should be done and should be done quickly. Not only would it be good for Europe, it would free space at the table for emerging countries."
  • [Speaking about a future Commissioner for Economic and Financial Affairs also President of the Eurogroup] "Commissioner Almunia then becomes Secretary Almunia and combines those two roles."
  
  
• Jacques de Larosière, BNP Paribas:
  • "Much will depend on the speed and intensity of the de-leveraging process. The most indebted parts of the private sector will suffer most."
  • "This crisis is an ‘over-indebtedness’ crisis."
  • "We see the crisis as the result of a regulatory failure. It was not."
  • "The idea is not to just put more regulation on top of existing regulation. If the regulation has been misleading then it’s not going to help. You have to overhaul those. It’s not just more regulation that’s needed, it’s better regulation."
  • "If in 2009, in the middle of all this mess, Europe is not able to get together on a modest compromise, then forget about it."
  
  
• Felipe González, Reflection Group on the Future of Europe:
  • "The crisis while serious represents an opportunity for Europe to look at itself in the mirror and engage in self-criticism."
  • "The reply to the crisis has been nationally-based and insufficiently Community-structured."
  • "I'm a little irritated that national leaders complain the Commission lacks initiative while preventing the Commission from taking initiatives."
  • "One of the biggest problems in Europe is that of rigidity. This hampers the taking of initiatives....There is nothing encouraging innovation...there is no reward."
  • "Europe is losing its relevance. I have seen no enthusiasm on the part of the electorate for the elections. We need to look at the model which has made Europe a world power in the past...It is perhaps something of the past. It is time to engage in a new social contract."
  
  
• Gert-Jan Koopman, DG Economic and Financial Affairs, European Commission:
  • "The overall population is looking to be broadly comparable in 2060 to now but the key difference is the composition. The dependency ratio will go up by nearly 30%."
  • "This is a very different world we are looking at. It is both older and less dynamic. It is a rather more difficult world than many of us seem to realise."
  
  
• Henri Bogaert, Belgian Federal Planning Bureau, Working Group on Ageing (AWG), EU Economic Policy Committee (EPC):
  • "The impact of demography could be frontloaded by saving now. The impact of technology is something that might be born by future generations."
  • "There is a very real need to put in place all the necessary policies to avoid the crisis turning into a permanent shock."
  
  
• Vladimír Špidla, European Commissioner for Employment, Social Affairs and Equal Opportunities:
  • "At the age of 60, there is still a lot you can do, but only 40% of people are still active. We should reverse the trend for early retirement. Old people have lots of skills that we should make better use of: they have experience, they are usually available, and they have a maturity that younger workers usually lack. "
  • "We need to emerge from this crisis with more and better employment opportunities for older people."
  • "Reform of pensions is not just a financial matter, it is a very major political issue."
  
  
• Eduard Janota, Minister of Finance, Czech Republic:
  • "The crisis chastised countries that had not used good times to reform their public finances, a failure that had made their current situation even more serious."
  • "The crew has to support the captain during this storm."
  • "The Czech Presidency has made the sustainability of public finances one of its priorities."
  
  
• Anders Borg, Minister of Finance, Sweden:
  • "Sweden’s dependency ratio will rise from 28% to 50% between now and 2050. But that is one of the lower rates. In Poland, it is expected to rise to 70%."
  • "If we want people to return to the labour force, there is a need for further tax cuts."
  
  
• Fernando Teixeira dos Santos, Minister of State and Finance, Portugal:
  • "From 2020, onwards; employment will fall."
  • "The current crisis will have an impact on public finances, but anti-crisis measures can help reduce this impact."
  • "Reforms on social expenditure are crucial – and I can point to the positive effects of pension reforms in Portugal."
  
  
• Carlo Cottarelli, IMF:
  • "Health spending is even more challenging than pensions when it comes to finding solutions."
  
  
• Robert Holzmann, World Bank:
  • "The financial crisis will have an impact on funding systems but it pales compared to demographic problems."
  
  
• Martine Durand, OECD:
  • "Pension levels have been cut sustainably. But is it really sustainable? Fiscally it may be, but socially it is not."
  
  
• Dick Sluimers, APG Group:
  • "An important lesson [of the Ageing Report 2009] is that a shift towards more funded pension schemes is essential in Europe."
  
  
• Pervenche Berès, European Parliament:
  • "The market is likely to say now: ‘We are still under recovery, we could not support new rules’, but later it will be: ‘Oh, come on, the economy is going well. We don’t need new rules."
  • "It’s a mistake to have tackled only systemic entities. Because you don’t know what a systemic entity is before it happens."
  
  
• Ignazio Angeloni, European Central Bank:
  • "Global imbalances clearly paved the way to the crisis and the crisis would not have happened, or not in the way it did, had there been no global imbalances."
  • "There is a clear correlation between excess demand and asset price bubbles."
  • "The US attracts capital because of its status as a safe haven. The safe haven effect makes the international adjustment process not work."
  
  
• Garry J. Schinasi, IMF (on sabbatical):
  • "The over-the-counter derivatives market is now in fact the global money market. And this market is largely unregulated."
  • "Early warning systems are providing a false hope that we’ll somehow see the next crisis coming. The system needs to be addressed."
  • "In the end, the US government didn’t save Lehman London or Lehman Tokyo. And in Europe it inevitably evolved to each nation saving its own part of Fortis. That’s natural because of the incentive structure. It’s nation-oriented."
  • "Interbank markets need to be supervised as global institutions; they can no longer be supervised as national institutions"
  • "Write a uniform European regulatory book and hold it up to Asia, the US and Latin America and say: is this a good model?"
  • "I don’t sense that there is that urgency at the head of state level to forge a global solution."
  
  
• Már Gudmundsson, Bank for International Settlements:
  • "There’s been global finance without global supervision."
  • "We should not pretend to have the knowledge to design failsafe rules and we should be ready to deal with the unexpected."
  
  
• Marco Annunziata, UniCredit Group:
  • "There should also be efforts to improve financial literacy at large."
  • "We should consider moving toward a more unified financial supervision in Europe. National supervision structures are not enough to prevent a crisis."
  • "The IMF should play the key role in resolving global imbalances. But the root of the problem was a global savings glut. Now, with the crisis it will be hard to encourage households to dissave."
  
  
• Andres Sutt, Bank of Estonia:
  • "Better regulation doesn’t necessarily mean more. Industry is smart and clever, and that’s why regulation also has to be smart."
  
  
• Sir Tony Atkinson, Nuffield College at Oxford University:
  • "Economists have come to resemble highly bred race horses, able to run their race but unable to jump over fences or plow fields."
  • "The 1929 stock market crash primarily affected the wealthy since they held the bulk of shares. Now institutions hold the bulk of shares for individuals who are not necessarily well-off."
  • "We need to monitor the distributional impact of the crisis, just as we monitor its macroeconomic impact."
  • "We should be certain that the burden of recession is being fairly spread."
  • "Just as we have been carrying out stress tests on our financial structure, we ought to be stress testing our social protection institutions."