There Is Room for Rate Cuts - WSJ
There Is Room for Rate Cuts
The euro will not only survive the crisis, but will also become more attractive for new countries in the future.
By Pedro SolbesFrom today's Wall Street Journal Europe.
There is little doubt that the world faces an unprecedented financial crisis and that advanced economies are suffering their worst recession since World War II. Developing economies have also been hit and, although they face this crisis in a better situation than in the past, they too are experiencing a deep downturn. As a result, global trade is suffering a sharp slowdown. Despite rapid policy responses, financial markets remain distressed, generating a negative feedback loop between recession and financial strains.
Certainly, the initiatives adopted so far go in the right direction and will bear fruit gradually in the coming months. Therefore, in spite of the highly uncertain outlook, we can expect global growth to bottom out in late 2009 and a gradual recovery in 2010. The most important thing now is to implement quickly all the envisaged stimulus packages and to avoid succumbing to protectionist pressures. On the contrary, what we need is to step up the degree of active coordination as the economic crisis deepens.