On Monday, May 11, the German Marshall Fund (GMF) together with the Friedrich Naumann Foundation hosted a panel discussion in Berlin titled "Tackling the Financial Crisis - Approaches From Both Sides of the Atlantic," featuring GMF Transatlantic Fellow Joseph Quinlan, Member of the German Bundestag Otto Fricke (FDP), Steven Clemons of the New America Foundation and Daniela Schwarzer of Stiftung Wissenschaft und Politik. The discussion was moderated by Petra Pinzler of the German weekly DIE ZEIT.
The panel began by focusing on the measures taken so far to fight the crisis and looked particularly at the stimulus packages on both sides of the Atlantic. Steve Clemons noted that the "patient" United States seems to be beyond the critical moment, and that President Obama and his team seem to have generated some trust in the future of the economy. Joe Quinlan added that the Administration and the banking sector are still feeling their way, and that more transatlantic coordination would be desirable. He emphasized that he sees no need for more regulation, rather for better regulation, as well as better supervisory capacity, and better enforcement. In his opinion, a major problem is that there are not enough regulators to do their current jobs. Otto Fricke pointed out the the private sector pays much more and therefore it is difficult to make the position of regulators attactive. He also pointed to the need for an EU framework of regulation as national approaches are not enough. On the German and European stimulus packages, Fricke said "Europe is spending - only more slowly" and that the important thing is to not turn this into a competition about who spends more, but into a constructive discussion about what is the right way to spend. Daniela Schwarzer provided the European perspective, saying that the stable Euro is a positive sign. She pointed out that the EU as of yet has no structures or institutions that would have allowed for strategic coherence among the national stimulus packages. The Eurogroup, where the Ministers of Finance come together, is crucial to the success of the Eurozone; however, that Euroconsensus is not always shared by the heads of state. There is a need for such debate and coordination at the highest level to confront the challenges ahead.
The debate moved to whether Germany is doing enough to battle the current crisis. None of the American panelists thought so. Joe Quinlan pointed out that Wall Street and Washington are frustrated by the complacency and "behind the curb mentality" they see in Europe. In his opinion, there will always be bubbles in capitalism, but regulation should be able to stop the bubble before it gets too big and bursts. Otto Fricke responded that one had to keep in mind the European fear of inflation, and that while there is no short term risk of inflation, it is a very real mid-term prospect. He agreed that Germany was not simply a victim of the crisis, but had also been party to the system that brought it about. He urged a return to fair competition, with a regulatory framework to control it. He warned against any more subsidies, but rather challenged his generation in Germany to step up to the challenge of re-creating a well-regulated market.