Time for Overhauling the Global Economy

Abstract

The third document prepared by The Group of Lecce. Dear Leaders, The global economy continues to be affected by great instability and deep uncertainty. Notwithstanding your successful effort at dealing with the emergencies of the crisis over the past two years, there is still no perception – as, perhaps, there is not yet real persuasion on your part – that the world nations have learned the hard lesson and are finally ready to turn page. And the hard lesson is the one that your forefathers – the leaders of the free world that some sixty-five years ago emerged from the abyss of war – were able to learn and transfuse into action: An internationalized economy needs a strong and genuine multilateral framework, providing for effective rules by which each and all nations should feel obliged to abide. An internationalized economy is, indeed, a place where each nation should feel responsible for considering the impact that its policy decisions would have on others, and decide accordingly, a place where national policies with potential systemic impact should be broadly agreed on internationally before being implemented. In response to your vigorous thrust following the crisis, actions are being considered in national capitals and key international forums, which are aimed to reduce financial risks. But the root causes of the crisis seem to remain unaddressed, and the international financial system still needs major structural reforms: If not even a crisis of the proportions we are living through will be enough this time to persuade you finally to embrace a new order, what else will?