The world is changing dramatically and political governance is at stake.
The U.S. subprime loan fiasco spawned a global financial crisis and the world economy is assailed by a recession comparable to the Great Depression of the 1930s. At the financial summits of November 2008 and April 2009, and at this year's Group of Eight summit in July in L'Aquila, Italy, the world's leading industrialized nations committed to taking on the economic challenges jointly. They have taken all available fiscal and financial measures to stabilize the global economy, and revive demand.
As a result, the world economy appears to be emerging from the worst phase. But the problem of bad loans hovers over financial markets in the United States and, especially, Europe, and there is no prospect that fiscal stimulus measures will lead to autonomous economic recovery. This is why policymakers in each nation need to impose careful economic management.