Financial Face-Lift

In their editorials kicking off the week, European newspapers echoed demands voiced at the weekend's European economic summit to get tough with tax havens and introduce sweeping reforms to avoid future economic meltdowns, but expressed skepticism about follow-through.

In London, The Times pointed out that the economic summit served as a reminder that it is time for EU countries to set aside their differences. "Europe is beset by bickering now, when it most needs strong, co-ordinated leadership," it wrote in its Online edition. "But France and Germany disagree. Gordon Brown's relations with Angela Merkel are fraying... Above all, however, EU leaders, and especially Britain, need to strengthen ties with Germany. The coalition in Berlin, facing a general election [in September], is preoccupied with domestic politics. But Mr Brown should build on the Berlin meeting to remind the Cabinet that Germany is, and must remain, a vital ally for everyone in Europe."

"The scale of the crisis has one advantage," concedes the widely-read French daily Le Journal La Haute-Marne based in Chaumont. "It reconciles the various European stances -- regardless of ideologies. The common denominator is regulation, and from now on, the targets are tax havens. Whether left-wing or right-wing, all governments are aware that tax havens were a boon to irregularities within the international financial markets. And that they're ready to resume their sinister work as soon as the crisis is over. Even liberal Britain now appears to be siding with the countries demanding tighter regulation, and sanctions for anyone who refuses to stick to the rules."

Over in Amsterdam, left-leaning Dutch daily Trouw focused on proposals for a common bond issue among the 16 countries that use the euro. "One idea that was not discussed in Berlin even though it has a growing number of advocates, is that of a European treasury bond guaranteed by all EU states," it wrote on Monday. "On Saturday, the IMF also pledged support for such a plan. Until now, countries within the euro-zone that enjoy less trust on the financial stage than others, have had to pay higher interest on loans. This could be avoided with the help of such an EU bond."

The Financial Times Deutschland, meanwhile, was in finger-wagging mode: "How far the new US government will be willing to go with new transparency laws on hedge funds and rating agencies will be more decisive than European unity," it cautioned. "Everything suggests that Barack Obama's approach is closer to the European one that his predecessor's was, but nevertheless, the US, like France, recently exhibited protectionist tendencies that jeopardize this ambitious project. And even were every one of Europe's demands to be met, the world would not be immune to financial crises. The current financial tsunami was not only triggered by supervisory deficiencies and wrong bonus systems. For as long as regulators fail to do the job properly, tighter regulation is not the solution."

Author: Jane Paulick

Editor: Nick Amies