Source: TOI on line
If we take the first rumblings of trouble in the US sub-prime mortgage markets as the starting point, it’s been roughly five years since the global financial crisis began. There have been significant qualitative changes along the way. The US now seems, at least in relative terms, best placed to pull itself out of a slowdown. Consensus forecasts peg US growth rates for 2012 at 2% contrasted to 0.3-0.5% for Europe.
The epicentre of the crisis has travelled across the Atlantic and plonked itself squarely in Europe. Emerging markets like India and China that acted as a critical buffer for the world economy now find themselves mired in their own problems.
Why hasn’t Europe been up with a quick solution to its problems despite the unending parade of ‘summits’ held to grapple with the crisis? To start with, there was the problem of ‘denial’ that should be familiar to readers acquainted with the way things work in India. Europe’s policymakers went through a prolonged phase roughly between 2008 and end-2010 when they refused to face the fact that a serious sovereign debt crisis was brewing.
Categories: Europe