The crisis is Global

The first stages of the reform policy were actually quite good in many reform countries - with varying speed. The market economy got more or less broad breakthroughs.

But then came a lot of wrong economic policy decisions in a series of reform countries. For my part, I have been warning since 2001 for a premature currency linked to the euro. I still cannot understand why this important subject did not provoke a wider debate here at home.

Another step in the wrong direction was the quick deregulation of the financial markets. The experiences of the Mexico crisis in 1994 and the Asian crisis in 1997/98 were already "forgotten". The credit grant in foreign currency should have been liberalized more carefully.

This finding, however, do not free foreign banks from their responsibilities, especially Swedish and Austrian banks in the Baltic and Southeastern Europe. One or two bank-men in Sweden should also have remembered the unfortunate counseling about 30 years ago when Swedish farmers were recommended to lend money in Swiss francs due to the low Swiss interest rate.

Or do we have a new example of the lack of history in Sweden? The short term is not enough, either for the past or the future.

I should also mention that there were statistics showing that household loans had risen by an average of 44 percent in the reform countries between 2003 and 2007. The credit bubble was in a number of countries, and it certainly did not happen overnight.

The so-called Eastern-Europe model included a lot of capital exports “from West to East”. Such capital transfers are positive if they take place in the right pace (which also is approved by research). The excesses, however, should also have been detected earlier by international organizations such as EBRD, EU, IMF, etc.

Despite these misses, it would be wrong to categorically condemn the so-called Eastern European model. However, it was not provided with sufficient microeconomic and an aggregate financial market analysis (which also would not have been the case concerning the U.S. "subprime" excesses "). From now on, the new market economies in Central and Eastern Europe need better coordinated analysis and financial supervision - but also more long-term oriented business leaders in the old OECD countries.

For us in Western and Northern Europe, it should therefore be obvious to view the developments in a positive way in the NMS regions and other European reform countries. We should also avoid the very useful "know-it-all" attitude that emerged especially in the Anglo-Saxon analysis values after the Asian crisis - and instead show good spirit of cooperation.