Conference on Euro discusses economic crisis

A conference on the Euro at the Peterson Institute for International Economics focused mostly on the economic crisis in the U.S. and the world. Lorenzo Bini Smaghi, a member of the Executive Board of the European Central Bank, emphasized that a solution for the entire world market, not just the EU or the US, was needed. When many markets are interconnected, a weak spot in one economy affects all of the economies, he said. He wanted to reassure banks that they will get all of the money they need so that they can start lending, fearing that the credit crunch will hurt the main economy.

Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund, agreed that action is needed to be taken immediately to try to solve the crisis. He pointed out that confidence in the market is necessary to stop the credit freeze. Any action taken, said Strauss-Kahn, should have a clear objective, have oversight on how public money is used, should be comprehensive and coordinated with all actors at every level. He added that the action must also be acceptable for citizens. “We can solve the problem we’re facing,” said Strauss-Kahn, we just need to act quickly.