Stark divisions between Europe and the United States over how to reform the global financial architecture were highlighted yesterday by an attack by German Chancellor Gerhard Schroeder on speculators for wrecking economies.
Urging rapid reform of the financial system, he said worldwide development and co-operation was being derailed by speculative capital movements which had driven national and international exchanges and national economies to the brink of ruin.
He told a World Economic Forum meeting that 'many thousands of people' had been deprived of their livelihood and had their hopes 'thoroughly dashed'.
'If even George Soros - and he's a man who ought to know, having earned himself billions through such speculation - urges us to introduce regulatory factors to ensure justice, then it is high time for us to get down to some serious negotiating on an international financial architecture.' The comments contrast with the increasingly laissez faire policy adopted by the United States, which believes control of markets will result in even sharper financial volatility.
The US has used the annual World Economic Forum to set out its own views and has urged Europe to implement more structural reforms to create stability in global financial markets.
In particular, it believes Europe should implement policies aimed at boosting demand and increasing its share of imports, particularly from the crisis-hit Asian and Latin American countries.