ChangingTheRules

Some of you who have followed my articles in the past might find this one a bit odd. I have always argued for international cooperation and cross border freedom and today I am urging some of the opposite.

During this financial crisis there is the danger that well funded opportunists will raid across international borders to pick up bargains. Britain’s own Sir Philip Greene is apparently attempting to exploit Iceland’s own economic collapse to see if he can pillage that country’s international retail operations.

In light of the fact that Britain’s main commercial retail banks are worth about a tenth of their market capitalization last year this fate could soon befall them if they are not protected by the state.

Similarly, if the country suffers another week like the last one the industrial landscape will offer an environment of bargains the like of which have never been available before. This will be so tempting that the national identity of the UK economy will go from being acceptably international to totally foreign in a matter of weeks.

The same scenario could unfold all over the western world, particularly in the USA and Western Europe. It is essential that we don’t let short-term opportunism turn into the end of the free market for the host countries.

There is a big plus side if the major economic powers can work together for the common good and this will be achieved if they think longer term when they take agreed short-term tactical decisions. If countries break ranks in bodies like the European Union it would spell disaster for the institution.

In a few hours there will be coordinated announcements of the proposed actions to be taken internationally by each government, acting in concert, to steady the economic ship. It is beyond doubt that these moves are essential, and their success will only be evident if the pandemonium and panic selling eases with the opening of the markets. Another week of losses of the magnitude of recent weeks is simply too frightening to contemplate.