London
16 October 2008
European stock indexes have been lower, following earlier falls in Asia. For VOA, Tom Rivers reports from London.
Fears of a sharp global economic slowdown gripped European markets, with all the major trading centers showing volatility. The primary concern was that a worldwide recession might just be inevitable, despite a coordinated bank rescue plan being discussed in places like Brussels, where European leaders are meeting.
One of the leading voices there is British Prime Minister Gordon Brown whose so-called British model of bank recapitalization is being mirrored elsewhere around the world.
Mr. Brown acknowledges that turbulent times still lie ahead as the international financial problems filter down into the real economy.
"People have suffered that hit on their standards of living as a result of the rise in global oil prices and food prices and at the same time, we have had this credit crunch," he said. "These are both what you might call the problems of an economy that is now global. So, We have seen the first resources crisis of the global economy when oil demand has been higher than supply and we have seen the first financial crisis of this new age of globalization and that is what we are trying to deal with at the moment."
The Swiss government is the latest to announce plans to support its banking system with billions of dollars. UBS is being offered up to $54 billion so it can rid itself of some bad securities.
For leaders like Prime Minister Brown, actions like this represent yet another battle in what may well be a lengthy campaign.
"I think people know that these problems did not start in Britain," he said. "That they started in America as far as the banking system is concerned. I think they know that every government around the world is trying to deal with them. It is my aim to take the British people through these difficulties and do so in the fairest possible way."
Despite coordinated interest rate drops and massive injections of cash into the system from central banks, turning around global markets is an inexact science.
Leaders like Gordon Brown remind consumers that remedies will take time. And until the tight global credit logjam really can be broken up, the currently tense economic climate will remain.