Finding economic common cause

The G7 and EU work on unified solutions to the financial meltdown

Those who believe that “governments can wave a wand and stop a global financial panic,” said The Wall Street Journal in an editorial, might be disappointed in the weekend’s G7 meeting. But “for everyone else, it should be considered progress.” Unlike in the Great Depression, the finance ministers of the world’s top economies recognized we're in this together and agreed to five principles to get us out of this mess.

Despite the “generality of the pronouncements,” said the Economist online, “something was accomplished” at the summit—notably a commitment to recapitalizing banks. European leaders took that one step further, pledging to insure new bank loans. And there’s also a growing consensus toward “partial nationalization of banks.”

The consensus is that any “tool—regardless of how economically unorthodox—will be used if needed,” said Pete Engardio in BusinessWeek online, and that “the U.S. is “heading into a very deep recession.” Even if the U.S. and Europe get credit markets working again, fixing this crisis “will require years of financial workouts and restructuring.”