European nations are sick of spending money to stimulate the economy. Or, more likely, they are running out of access to capital and simply don’t want to admit it.
At the G20 summit, where the US and several Asian nations said that they were ready to pony up more cash to save the world, most countries on the continent demurred.
According to Reuters, “We consider that in Europe we have already invested a lot for the recovery, and that the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself,” French President Nicolas Sarkozy told a news conference.
What was left out of the conversation about which nations want to shovel more money into the system and which simply want stricter rules about how it is spent is that the European central banks may be seeing resistance to raising more money. With the US, Japan, and UK in the international markets raising capital, there may be a squeeze on that is making finds more expensive. The debt of France may not be as attractive as US debt. If so, France may not be willing to pay a premium to add to its coffers.
Either the members of the EU think that the US is foolish to focus on spending and not regulating, or European countries can’t afford to play the game of who can raise the most capital.
Douglas A. McIntyre
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