Power Line has a post this morning on the posturing that is going on at the G-20 summit as the world leaders try to decide how to handle the current financial crisis.  The article points out that Europe is taking the position that America is responsible for the global meltdown and therefore American should fix it.  The European countries are not really interested in inacting expensive stimulus plans–their governments have had massive social spending for decades. 

It is interesting, however, to look at the facts surrounding the worldwide meltdown.  According to the article:

“Consider the banks. Bromund and Markheim point to a survey by the Centre for European Policy Studies which found that the average leverage ratio of Europe’s twelve largest banks as of September 2008 was 35 to 1, compared to less than 20 to 1 in the U.S. The survey described Europe’s ratios as “a disaster in waiting.”

Or consider real estate. The IMF has noted out that, in the run-up to the crisis, “credit aggregates grew extremely fast in the United Kingdom, Spain, Iceland, and several Eastern European countries,” fueling real estate booms. As Bromund and Markheim explain, “the bubbles in Europe were as unsustainable as those in the U.S.””

One of the main issues that the European countries will take up is the elimination of ‘tax havens’.  Basically, Europeans have learned that if there is a country with low tax rates, the world corporations will move there–we saw that with the growth of the Irish economy when Ireland cut its corporate tax rate.  People vote with their feet, and there is a group of people in the world who are trying to prevent that from happening.