It's crunch time for those who have been preaching the Anglo-Saxon invasion of European corporate cu...
It's crunch time for those who have been preaching the Anglo-Saxon invasion of European corporate culture. For the past few years investors have been encouraged to pump money into the continent on the back of the restructuring story. With the outlook for the world economy at that time looking good, the continent's commitment to all those US and UK business principles sounded great but was never tested.
The picture being painted was one of investors getting all the benefits of equities with the added kicker of greater returns generated by growing free market efficiencies.
As world markets and economies start to look distinctly unhealthy it will soon become clear whether the tough decisions are going to be made or whether European governments are going to prop up any of their ailing and failing businesses. Switzerland has already put close on £200m into Swiss Air and what is going to be interesting to see is whether this is taken as an example of government meddling in the free market or justifiable intervention in the face of exceptional circumstances.
At the moment it is patriotic and a sign of one's belief in the free market to be interventionist. Federal Reserve rate cuts and George W Bush's decision to unveil a $130bn stimulus package to boost the US, and hence the world, economy are all being warmly welcomed by financial markets.
So why should it be any different if European governments use the cover of patriotism and defence of the world economy to prop up the odd sagging business? Perhaps even the odd business that was sagging before the events of 11 September?
In the current environment of falling stock markets and economic gloom and doom it becomes a lot easier to empathise with the Japanese authorities.
It has been very easy over the years for Western commentators to point out Japan's problems and solutions to its problems but this has all been done while the West has been getting richer. Now the West looks as if it might be getting poorer, on however temporary a basis, the gung-ho modern economic theory is taking a back seat and if its proponents have a criticism of central government and banks its that they are not doing enough.
If this is how quickly sentiment and feelings change on the back of poor economic news that is not yet a year old, then the entrenched attitude of the Japanese after a decade of an even worse outlook is at the very least understandable. And if this is the case it might affect UK investors' views of how long it will be before the Japanese are willing and able to turn their economy around.
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