Globalization is good for the World. Europe may be loosing a few positions in the race for prosperity, but China, Brazil and India, have gained a lot. Only Africa is not playing the game (because it is too poor to take advantage?). But Globalization is also mad and needs to be somehow controlled. Otherwise it implies that the haves get a disproportionate share of the gains from it, in comparison to the have-nots. It is bearable, because it is not about the transfer of income per se, but about the distribution of the gains of the more global economy (look at Africa, again, but also at the gains of the financial system around the World). Globalization also needs to be governed because it is a source of instability and this is even more important. We should worry about that, because Globalization is certainly reversible.
The European periphery in the eurozone is now facing a tremendous crisis, which ultimately affects the whole monetary union. The crisis is the consequence of three intervening factors: the international crisis, which originated in 2007 in the US; the performance of peripheral governments; and consumer preferences. These are the direct causes, of course. It is relevant to ascertain the relative importance of those factors, but that requires research with an appropriate analytical framework for which we are still waiting for.
But even if we do not know the relative importance of the factors behind the crisis, we certainly know that the governments in the periphery are now in trouble because they had to borrow large sums of money in order to fill the gap left open by the financial system in the aftermath of the subprime crisis. This part of the story is certainly true: banks lent too much, regulation and rating agencies did not do their work properly, the financial system almost collapsed, it was saved by large government loans, which led to the increase in public deficits and public debt, and now governments are facing the same problem that banks faced in the first place, and they have to be rescued by international organizations (IMF) and stronger governments (Berlin-Paris). This certainly can’t go on and something has to be done. Financial institutions were at the bottom of the problem, they were then saved and now the saviours need to be rescued.
Too much power has been transferred to the financial system and that has to be corrected. Even if it implies that the pace of globalization is slowed down. Yes, it is hard for an economist to conclude that way, but after two years of watching the mess unfold in front of our eyes, it seems that a bit more of control is the only thing that remains to be done. Sorry, Globalization, but be sure that that would be for your own interest too.