THE EURO would have to be reformed and Europe’s banking system recapitalised, former British prime minister Gordon Brown told an international audience in Abu Dhabi yesterday.
Mr Brown was addressing the annual meeting of the World Economic Forum’s network of Global Agenda Councils which is discussing a wide range of current problems and issues.
“Where it was America in 2008 whose banks were failing, I think people now recognise that in Europe we not only have a fiscal problem but we have a banking problem and that we have a growth and competitiveness problem,” he said.
It was also generally acknowledged “that the euro in its present form will not survive but will have to be reformed, that Europe’s banking system will have to be recapitalised, that Europe will have to find a strategy to fund the different needs of the different countries that are finding it difficult to raise funds on the international markets”.
He also called for “a global growth pact, a co-ordination between different nations of the world so that we can move the world economy at this historic juncture forward into higher levels of growth and higher levels of opportunity”.
Mr Brown said there was now “a category of problem that is a global problem, in other words it is a problem that cannot be solved without people coming together from different nations and on the basis of international co-operation to work out solutions”.
Global civic society also had to be involved, because “one of the features of the new world is that people can contact and communicate with each other almost instantaneously in every part of the world”. He said “global co-operation is even more necessary today because we are facing, in my view, a new but avoidable global downturn”. The world needed to “co-operate and write a new chapter in the history of international co-operation to deal with the economic problems”.
Otherwise, he warned “we will face a disorderly retreat into a new kind of protectionism that will damage our ability to build on the successes of globalisation over recent years”.
He added that “it used to be said of the Habsburg monarchs of Europe of the 19th century that they would never learn by their mistakes” and he was concerned that the lessons of the protectionism of the 1930s were being ignored.
