View from India

The world will watch with interest as the most successful grouping of nations, the EU, reacts to its recession, writes The Tribune in India. We look at comment on the financial crisis from the global press.

The Tribune (India)

It is official now. The 15 European countries that constitute the Euro Zone are in the grip of recession as a result of the international financial crisis. …

Shrinking demand for goods and services and increasing job cuts — the most dreaded effect of recession — in the European Union are alarming for India too. A large number of Indians work in the EU countries. The EU’s contribution to the world’s GDP is the second highest — 24.7 per cent — after the US’s 30 per cent. There is the possibility of the European Central Bank lowering its interest rate to increase liquidity in the financial system. But many experts believe that this alone may not help at this stage, as the problem is related to the people’s expectations. Governments will have to initiate other measures to stimulate demand.

Resorting to [the] trade protectionism that led to the crisis of the thirties is unthinkable today because of the presence of the WTO. Europe is slightly better placed to handle the crisis because of the well-knit EU system. … There is the possibility of the EU going in for direct expenditures by the governments of its member-countries to stimulate demand. What the EU does will be watched with considerable interest by the world community because of its image of being the most successful grouping of 27 nations. ...