The global financial and economic crisis is galvanizing Europe into furthering the project of a political union and may trigger spreading unrest elsewhere in the world, Italian Economy Minister Giulio Tremonti said Saturday.
We are seeing a "colossal restructuring of the political architecture of Europe," Tremonti told central and commercial bankers, business leaders and politicians from around Europe at a conference in this northern Italian lakeside town.
Referring to the drawn-out negotiations to establish pan-European institutions and facilities to deal with the current sovereign debt crisis and create a new "economic governance" in the European Union, Tremonti said: "This is nation building."
While bullish on Europe's prospects, Tremonti was bearish on the rest of the world.
The Group of 20 nations is "absolutely obsolete" as a forum for global governance as it doesn't adequately represent Africa and the Arab world, he said.
Unrest in much of the latter is a byproduct of globalization on the political rather than the manufacturing front and will "spread to Asia," he said.
"It's hard to be king in the Internet age," he said of regimes with kleptocratic or autocratic regimes.
Tremonti, who was in China for a G-20 forum until Friday, also said that technical talks about rebalancing the global economy often floundered in the face of what he said was the emergence of continental economic blocs.
When central bankers try to cajole China into changing its currency policy, the response "is not that of a central banker but of a government," Tremonti said.
As for Europe, the minister said he was confident that the EU would eventually adopt eurobonds, in which member states could pool at least some of their sovereign debt.
Italy, which has the second-highest public debt level in the euro area at 119% of gross domestic product, has long championed the eurobond idea, which successive German governments have always rejected as a way for profligate countries to pass their cleanup bills onto those practicing fiscal virtue.
"It's not an Italian way to get around the rules," he said. "We could even recuse ourselves from the benefits of eurobonds for five years."
Source: http://online.wsj.com
We are seeing a "colossal restructuring of the political architecture of Europe," Tremonti told central and commercial bankers, business leaders and politicians from around Europe at a conference in this northern Italian lakeside town.
Referring to the drawn-out negotiations to establish pan-European institutions and facilities to deal with the current sovereign debt crisis and create a new "economic governance" in the European Union, Tremonti said: "This is nation building."
While bullish on Europe's prospects, Tremonti was bearish on the rest of the world.
The Group of 20 nations is "absolutely obsolete" as a forum for global governance as it doesn't adequately represent Africa and the Arab world, he said.
Unrest in much of the latter is a byproduct of globalization on the political rather than the manufacturing front and will "spread to Asia," he said.
"It's hard to be king in the Internet age," he said of regimes with kleptocratic or autocratic regimes.
Tremonti, who was in China for a G-20 forum until Friday, also said that technical talks about rebalancing the global economy often floundered in the face of what he said was the emergence of continental economic blocs.
When central bankers try to cajole China into changing its currency policy, the response "is not that of a central banker but of a government," Tremonti said.
As for Europe, the minister said he was confident that the EU would eventually adopt eurobonds, in which member states could pool at least some of their sovereign debt.
Italy, which has the second-highest public debt level in the euro area at 119% of gross domestic product, has long championed the eurobond idea, which successive German governments have always rejected as a way for profligate countries to pass their cleanup bills onto those practicing fiscal virtue.
"It's not an Italian way to get around the rules," he said. "We could even recuse ourselves from the benefits of eurobonds for five years."
Source: http://online.wsj.com
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