Eurozone politicians are engaged in a delicate balancing act. Once again, they are attempting to avert a growing crisis of confidence in the financial markets and the broader economic implications of the current turmoil.
Christine Lagarde, France’s economy minister, on Wednesday acknowledged that the world would be facing a “transformation” of its financial markets. But she also added that the French banking system need not fear “very negative” effects from the collapse of Lehman Brothers.
At the same moment, Angela Merkel, the German chancellor, was claiming that the impact in the eurozone’s biggest economy would be “moderate”. Indeed, since the beginning of this week all leading members of Germany’s ruling coalition have gone out of their way to reassure the German public that there was no reason to panic.
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