|In a financial system that suffers a radical loss of confidence, only institutions with more or less infinite resources can stem the tide. Such institutions can conceivably be self-help organizations, such as pools of powerful banks: that was for instance the case in 1907. The US Treasury indeed tried to put together such a pool on Sunday, September 14th, 2008. But in a climate of profound uncertainty, self-help is not enough. Governments or central banks are needed, because only they are both big and quick enough, and central banks need to rely more and more on governments for fiscal bailouts. U.S. policy makers are treating a new state capitalism as the emerging global reality. This new consensus is shared both across the Atlantic and the Pacific. It will change the nature of European politics and European integration, because in particular small nation-states are unable to cope with the demands of the new role.
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