Bad news for our kind and supportive European partners. Even though Der Spiegel ran a cover story about the cost of American arrogance, and the Daily Telegraph says it’s time to impose a “European vision” on the world economy, America is not solely to blame for the economic meltdown:
[T]he most recent data from the Bank for International Settlements should wipe the smirk from many European faces. Western European banks lent three-quarters of a total $US4.7 trillion ($7.5trillion) to emerging markets in eastern Europe, Latin America and Asia: a bursting bubble that surpasses the US sub-prime mess. Again, in Germany alone, financial institutions lent $US21.3 billion to Icelandic banks now collapsing, accounting for more than a quarter of all foreign lending to Iceland and more than five times the level of British lending, Iceland’s next biggest creditor country.
The truth is the most awful weapons of mass financial destruction came from London and Frankfurt. Aggressive German financiers were busily inventing and packaging up derivatives that Europeans would prefer to frame as a curse of American capitalism.
Nothing new here. After scolding the U.S. for its alleged money-grab in Iraq, European and Asian companies practically ran their American counterparts over to secure Iraqi contracts–once security improved. And–after a steady beat of EU agitation for diplomacy and sanctions (instead of threats and action) to stop Iran from acquiring nuclear weapons–EU exports to Iran went up 4.47 billion euros ($6.93 billion) in the first five months of the year.
The U.S. always takes the hit, giving European nations the cover to act like–well, Europe’s media caricatures of greedy America. Even now, with American treasury bills surging in international popularity, you can rest assured that there will be more triumphal pronouncements of the death of American capitalism.