The former British Prime Minister Tony Blair opened the conference by pointing out that the financial crisis and the subsequent global economic crisis are more complex than anything the world has ever seen, so complex indeed that even experienced experts do not have the answers at their fingertips.
The Chancellor sees the crisis that has shaken the financial markets and the ensuing shock waves as an expression of poorly coordinated globalisation. States around the world discovered that they were simply not prepared for a crisis of this magnitude, she stated.
Rethinking and taking action together
So that crises of this sort do not repeat themselves, we must not lose sight of the causes, the Chancellor argued. The next step must be for the international community together to draw the right conclusions and deduce the practical consequences for global capitalism. She already has a clear idea of the form this should take. "We need new regulations for the international financial markets and institutions,” the Chancellor once again underscored.
The crisis of capital is also a crisis of capitalism, declared French President and host of the conference, Nicolas Sarkozy. Our aim must not be to abolish capitalism, but to modify it. He would like to see moral and ethical values more firmly anchored in the capitalist system.
Social market economy with global dimensions
In addition to an internationally agreed global financial architecture, the Chancellor proposed international regulations for business. These could be drawn up and monitored under the aegis of a reorganised International Monetary Fund.
Equally, however, an influential economic council could be established under the auspices of the United Nations. Like the Security Council it would have to follow binding rules. "Just as we have a charter laying out human rights, we need a charter for international business in the long term,” said Angela Merkel. And it should have a clear goal – "a social market economy with global dimensions. That is what we are fighting for,” she underlined.
The Chancellor admitted that for many states it would be "an enormous step” to put their faith in an international organisation. Thanks to the European unification process, Europeans are well prepared. This is a process which has brought not only growth and prosperity, but also peace and good relations between neighbours.
The next G20 summit is scheduled to be held in London at the beginning of April. At this second summit meeting Europe must once again play a major role, Angela Merkel demanded. The heads of government of the euro-zone states will be meeting in advance in Berlin to agree on a common position.
Support for Renault, Volkswagen and their opposite numbers
After the conference, Angela Merkel and Nicolas Sarkozy met in the Elysée Palace to discuss the next economic- and financial-policy steps to be taken within the European Union. In view of the massive assistance promised to the American automobile industry by the US government, France and for support for European car-makers too to help them master the current crisis.
In particular the companies must be helped to hold on to their specialists, who will be needed again after the crisis, the Chancellor stated afterwards. The two countries aim to help businesses survive the crisis with loans and short-time working models.
Seeing the crisis as an opportunity
Both Angela Merkel and Nicolas Sarkozy see opportunities in the current crisis. If European businesses can now be put on a sound technological footing for the future, they could be in a stronger position post-crisis than before, they both hope.
This applies in particular to the automobile industry. "The motor car was invented here, and we will build the car for the 21st century,” the Chancellor stated with conviction. Engine technology will determine success and failure in the branch in future, she continued.
Step by step against the crisis
With a second investment package, Germany aims to ensure that the economy can survive with no major damage, the Chancellor explained to her French counterpart. After the branch-specific measures laid out in the first package adopted in November "systematic solutions” are now called for, from short-time working models to state investment and tax cuts.
"We need more action,” the Chancellor pointed out, and added, "We cannot counter the crisis with a one-off package. We will have to take one step after another”. The action needed will depend on how the markets develop.
