In response to the crisis, the State has intervened to rescue banks and financial institutions, to restore confidence in the market, and to guarantee loans and transactions. Within the space of a few weeks, the State in many countries has become the largest shareholder in major banks and insurance companies, resuming the role it had abandoned during the protracted era of privatizations.
The participants at this ASL seminar observed that history has always been marked by periods of change – the current one being no exception. The failure of the economic paradigms that underpinned Western development for decades has triggered a widespread sense of fear, which has translated into mistrust and instinctive and irrational behaviors.
The financial markets are in great difficulty and the world economy is going through troubled times. The current crisis has brought about profound social and cultural change. Never in the past have people and nations with histories and cultures so diverse expressed the same desire for certainty and called for a shared system of rules.
Created by the implosion of the US financial system, the last of the “bubbles” – that of the housing market – is the culmination of over a decade of shortsighted American monetary policies and an inadequate monitoring system. The situation is particularly grave, with forecasts that world growth will fall from 5% in 2007 to little more than 1% in 2009. As yet, it is not possible to predict how long the recession will last.
The breakfast meeting got underway with an identification of the long-term challenges that the economic crisis poses to the West. It was noted that the last twenty years have been marked by momentous changes. In the 1990s, the various areas of the world became increasingly interdependent. As a result, the last ten years have seen the highest global GDP growth ever recorded, fueled mainly by the US deficit and Chinese exports. However, the scale of this financial and trade imbalance cannot support future growth.
A key theme at this roundtable session was that leadership entails not only managing the present but also imagining and building the “future”. However, a series of obstacles is often encountered within this complex process, including an “antagonistic” attitude that is quite widespread in political – but also other – spheres, and a hollow rhetoric of the future steeped in words such as innovation, research, quality and merit that are often advocated but rarely given substance through effective decisions.
The Conference discussion focused on the overall international scenario that may emerge after the worst of the economic crisis has passed. A fundamental question arises concerning the nature of the restructure currently in progress. Does it represent a new paradigm for global capitalism or, less ambitiously, is it just a partial reorganization based on more cautious attitudes and expectations?
The National Conference got underway with the observation that one of the negative effects of the international financial crisis has been to halt debate on the problems afflicting the savings market in Italy, and on what measures are needed to overcome them. These problems were already beginning to emerge as early as the late 1990s, but they have become more evident as a result of the crisis.
The discussions at this roundtable event got underway with the acknowledgement that the flow of foreign direct investment (FDI) is an indicator which provides a snapshot of a country’s investment attractiveness and its competitiveness.
The participants of this roundtable discussion emphasized that any consideration of relations between banks and businesses should steer clear of simple dichotomies that view them as two opposing types of commercial entities. The behavior of banks and businesses should be assessed on a case-by-case basis in order to avoid simplistic generalizations.
This talk-debate session focused on early signs of a global economic recovery. Whilst the light at the end of the tunnel may not yet be clearly visible, some important signals are already starting to emerge. The first of these is that the governments of EU countries have acted in a timely and effectively coordinated manner. Indeed, their actions have confirmed the primacy of the political sphere and an intergovernmental approach over action through EU institutions (and the European Commission in particular).
The participants at this roundtable session noted that Pope Benedict XVI, in his recent encyclical entitled Caritas in veritate, reiterates that “the world is in trouble because of the lack of thinking”. It would seem that modern life, with its daily challenges, is focusing minds on more immediate and direct concerns. Today’s cultural impoverishment and loss of ideals has generated a fear of living, thought and reflection.
