Dubai and Switzerland

The debt crisis in Dubai and the Swiss vote to ban the building of new minarets are the focus of comment in the English-speaking press.

Fragile finance

The debt crisis in Dubai has rocked the financial markets worldwide and threatens confidence in the global economy, writes the Financial Times.

It is only when the tide goes out that you find out whose artificial islands are built on sand. Dubai, the glitzy debt-fuelled emirate famous for its extravagant sky-scrapers and man-made lagoons, announced this week that it is seeking a standstill on repayment of part of the debt of Dubai World, a state holding company ... Markets will not soon return to the panic of September 2008: the financial sector now has state backstops. But, because of these guarantees, fearful investors have started to worry about how safe sovereign debt is. Investors are growing nervous about Greece and Ireland, in particular. ...

Don’t panic

The Wall Street Journal, on the other hand, thinks that problems in Dubai will not have long-term consequences for the world economy.

The credit problems of a unit of Dubai’s state-owned investment company have given financial markets a scare, but put us down as thinking the event is left-over business from the mid-decade mania more than it is a sign of immediate new economic troubles. ... Dubai’s debt binge was made possible by the Federal Reserve’s global subsidy for credit. As a Middle East outpost without oil wealth, the city-state used easy credit in an effort to build itself into the next Singapore. And it has made some impressive strides as a tolerant entrepot for traders and investors looking for an entry into the Arab world. ...

Hatred beneath the harmony

The Swiss vote against building minarets will harm the country’s reputation as a tolerant financial power, writes The Guardian.

The Swiss claim passivity, diversity and tolerance as founding values. They have grown rich through trade and banking the world's money. They give shelter to wealthy migrants seeking to escape taxes at home. Their country even houses the offices of many international organisations, including large parts of the UN. But [on 29 November] the Swiss pulled aside their veneer of internationalism, voting heavily in favour of a referendum motion that will change the Swiss constitution to ban the building of minarets. The result — on a 53% turnout — should shame Switzerland and worry Europe. ...