European Agenda

Adam Posen is the deputy director of the Peterson Institute for International Economics in Washington, DC, and an expert on Europe.

DW-WORLD.DE: What is your assessment of the summit? Was it a success?

Adam Posen: Yes. It was not the transformative Bretton Woods II that people fantasized about, but it got a lot done. It had the right countries and the right people at the table, the principles agreed to were definitely in the direction we needed, you had commitment to expansion, you had a specific schedule and deadline for the next meeting, all in all as international agreements go, this is about as good as it gets.

It would have been inconceivable six months ago for the US and Britain to agree on creating new regulation structures of products like hedge funds and derivatives. Have the Americans and British reached a turning point where they share the opinion of most of Europe that global markets need to be regulated at a global level?

I think it's half of that. The Americans and the Brits are agreed that there has to be more regulation and oversight -- to be fair, some of us Americans had said that for a while. But the British are much further along to having this done at a global level whereas I think the Americans are still a little reluctant to have everything done at a global level. Also the agreement is much tighter and regulatory friendly for the derivates market than for the hedge funds market.

From a traditional American and British perspective, have we seen a Europeanization of how business is being perceived and controlled at this summit?

I think we have seen Europeanization of leadership at least temporarily. That the intellectual case is being made much better by the Europeans and they are setting the agenda. But that's not the same thing as a Europeanization of the markets. I don't think you are going to see suddenly Frankfurt and Milan running the show financially.

What does the action plan agreed to at this summit mean for American and European companies, many of whom are struggling to survive in the current financial crisis?

This action plan assures us that every country is going to try to stimulate the economy, and it takes away a lot of the stigma of what the Germans call Keynesian policy. In fact, Germany may find itself a laggard if it doesn't do stimulus as much as the other countries do and that will have direct benefits to the companies.

Unfortunately, the summit conclusion does not immediately free up extra credit for small and medium size businesses, which is going to be hard to come by and we can't really do without that.