The hard work of implementation – the devil in the details – is another. Experience has shown that internationally agreed standards, such as Basel II, are not always uniformly implemented in all the signatory countries. Furthermore, pressure from the financial industry to minimise regulatory changes in advanced economies is mounting by the day.
They will have to align demand and potential output more closely and, at the same time, consolidate government budgets. Compensatory measures by surplus countries would neither adequately address the problem nor would they bring notable relief to deficit economies. What can European policymakers contribute?