Europe and Japan turned a cold shoulder on Monday toward a American request that they bail out banks in the manner now being proposed in the United States.
The German chancellor, Angela Merkel, also took the opportunity to criticize the United States and Britain for opposing German efforts to put greater regulation, or at least reviews, of the financial sector on the international agenda last year, when she was chairwoman of the Group of 7 industrialized nations.
“Everyone who produces a real product knows what it looks like and what standards it is up to,” Ms. Merkel said. “One also needs to know with a financial product what’s involved. Otherwise, these sorts of things happen that we then all have to pay for”. . . The German finance minister, Peer Steinbrück, said, “None of the other six G-7 members will adopt a similar program to the U.S.”
Apart from a manifest lack of sympathy for a crisis they view as created by American banks and regulators, European governments are also constrained by rules within the 27-nation European Union that limit budget deficits and public debt . . . The Association of German Banks hinted that it would oppose the emerging bailout scheme if it gave American competitors a sudden advantage.
“We need to assure that disadvantages for foreign institutions do not arise from the U.S. program,” said Manfred Weber, executive director of the association. “It was, after all, American products that created the crisis and that created the contagion effects."
Nice. I especially like those furein banks crying that we got them into this mess. The takeaway message for me is that this crisis is way more manageable than Paulson and Bush have been letting on. Sure, there will be plenty of pain all around, but if those socialist G7 govts. feel there's no need to intervene to prop up the financial system, things aren't all that bad. Bernie, please, please, please stick it to them.