Just when the US and Japan seem inextricably tangled in their economic contradictions, the FT leads on the news that Europe is faltering too! Oh dear! Who will be the generous spender of last resort to get the world out of recession now? There seem to be no rich countries able to step forward. It couldn't possibly be that capitalism had better have an attack of philanthropy, that the billions of the reserve army of labour in the third world should step forward as the spenders of last resort? How about the 21st century equivalent of 19th century construction of the urban sewers - massive infrastructural projects - financed by special drawing rights from the IMF? No, wait a moment, that would give much of the employment to the local labour force. Much better idea - a massive plan to bring the benefits of advanced medicine to the people of the world. That way they remain grateful, and the work creation goes into the metropolitan economies and the profits of the monopoly capitalist drug companies! Chris Burford London ___________________ FT lead today: Concerns about the growth prospects for Europe deepened on Wednesday with figures showing a sharp fall in German business confidence and a downturn in industrial production in the 12-nation euro-zone. ... With the recent US downturn, hopes have turned to Europe to provide momentum for global growth. ... Wim Duisenberg, ECB president, hinted on Wednesday night the ECB might need to consider cutting interest rates because the US slowdown could be more serious than thought. "The slowdown in growth there may be stronger than earlier expected. That could have implications for world growth and therefore for the euro area as well," he told a business school meeting in Germany. Germany's centre-left government is now expected to cut its growth estimate for this year to 2.2 per cent or less, from its current forecast of at least 2.6 per cent. ... The Ifo business climate index for western Germany plunged to 94.9 from 97.5 in January, recording its eighth decline in the past nine months and touching its lowest level since July 1999. Figures published on Wednesday showed a 1.9 per cent decline in industrial production in the entire euro-zone in January from December - more than expected and reversing a rise in December. The Ifo report caused the euro to drop by more than half a US cent to below $0.90 as concern spread over German vulnerability to the US downturn. It was also under pressure because of perceptions - especially in the US - the ECB was too optimistic about the euro-zone's ability to escape the impact of the US.
