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Gabriel demands G20 set new economic course

The Local · 3 Nov 2011, 12:34

Published: 03 Nov 2011 12:34 GMT+01:00

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In a joint article on the Handelsblatt website in Germany and the Huffington Post in Britain, the three opposition leaders wrote that the world badly needed the G20 summit, currently meeting in Cannes, to show the kind of political leadership that has been lacking in the last 18 months.

“This is not the time for warm words and empty statements,” the leaders said, before citing GDP and unemployment figures that illustrated Europe’s current economic stagnation.

“First, we need a new deal based on the understanding that lack of demand is undermining the global recovery,” they said, referencing the massive public works programme set up by US President Franklin D. Roosevelt during the Great Depression.

The three social democrats criticized Europe’s centre-right governments for relying on austerity measures to combat the eurozone crisis.

“Immediate collective austerity simply will not work,” the article says. “Developments in the eurozone show that the IMF's Christine Lagarde was right to warn: ‘slamming on the brakes too quickly will hurt the recovery and worsen job prospects.’”

Instead, the centre-left leaders want to see a more balanced approach. As well as introducing a financial transaction tax across all major finance centres, the leaders are calling for a plan that combines labour market support and spending cuts, similar to the one President Barack Obama set out in the United States.

On top of that, the three politicians want to see the separation of retail and investment banking and more regulation of the rating agencies. “People across the world understand it was flaws in free-market capitalism that caused this crisis,” the article says. “They need to hear the positive case for responsible capitalism which will get us out of it.”

Miliband leads Britain’s Labour Party, while Juholt is head of the Swedish Social Democratic Workers' Party.

Story continues below…

The Local/bk

The Local (news@thelocal.de)

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Your comments about this article

16:33 November 3, 2011 by Englishted
Too little too late, the S.P.D and the Labour party were in power but then sucked up to the money men.

"responsible capitalism" is a contradiction in terms.
22:56 November 3, 2011 by derExDeutsche
Yes. We must print, borrow and spend more money. We need to dramatically increase the Public sector. We need to bulid a new rail hu-- oh wait -- a giant Statue for Obama. yes.
23:50 November 3, 2011 by Wise Up!
As expected, the Socialists have it backwards. Its not a lack of demand; it is the lack of investment that would create demand. The US has already tried a trillion stimulus and it doesn't work. It's spending cuts, smaller gov't and less taxes that work.
11:39 November 4, 2011 by luckylongshot
The problem is the fractional reserve banking system, which has allowed unethical bankers to load the western world with debt. The interest on the debt is effectively causing wage cuts as it means there is less money available for people to spend after the interest has been paid. Effective drops of more than 10% in disposable income are not unuusal due to this. This has caused demand to drop. One answer to this would be making charging interest illegal, as it has been for most of history. If this were done then instantly more money would be freed up and the economy would surge forwards. However the unethical bankers would be unhappy and since they own the politicians we will continue to get more ineffective ideas like these being proposed
19:25 November 4, 2011 by nedmesis
The population of both the EU and the U.S is way to large for sustainable living. The result is constant economic crisis.
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