PES Manifesto

Financial crisis: why has Europe to pay half of the worldwide bill?

Publié mardi 3 juin 2008 à 11h10
par Sortir de l'Impasse (vu 706 fois et 0 commentaires)

A lot has been written about the current financial crisis. We know that it has been generated by the US subprime mortgages. These subprimes are mortgages granted to people whose loan request had been refused by “traditional” banks and who had been given by specialised brokers a “second chance to realise the American dream of getting their own home”. This was under “bad” conditions, mainly much higher resetable interest rates. And since July 2007, we unfortunately discovered how high the price to pay was: millions of American borrowers have been strangled with so huge monthly payments that they had no other choice but to leave their home.

In this story, there are a lot of things to debate, and we will try to come back on them. But the most unbelievable issue is that Europe has to pay half of the bill…. for a crisis induced by the poor US government supervision on homebuilders! At the end of the day, Europe and the US suffered each around 150 billions US dollars losses so far, i.e. more than 1/3 of the French annual budget for instance!!!

Of course, things are not as simple as that, and for sure some European financial actors have their part of responsibility in the transmission of the crisis. But the starting point remains definitely the lack of US regulation regarding home mortgages.

So why are we going to pay without saying anything because of the US blind faith in the “laisser faire”? Unless we are wrong, none of our European leaders dare to directly ask the US to be accountable for their lack of regulation. We think that before making any proposal to improve the financial worldwide framework, this should be the first step.

Tags: EUA, UE