Dr. Alexander Mirtchev noted that the actions taken toward economic recovery, in particular, the state intervention in the market, generate complexities and imbalances that can have a medium- to long-term impact on sovereign debt, and, ultimately, global economic security. He emphasized that to be successful, state intervention should not only be balanced, but also consider its ongoing effect on strained sovereign balance sheets, and requires a clear exit strategy. This exit strategy should indicate to the markets the policy goals as well as the respective developments that the markets can factor in their calculations. Such a strategy would alleviate fear and uncertainty about the future, boost market confidence, and ultimately bring a new level of productivity, competitiveness and entrepreneurship, thus ameliorating global economic security. It is notable that the sovereign debt pressures resulting from the bailouts might have been avoidable, but, as has been pointed out before, government intervention in the markets was the “cure of choice” for the global economic crisis. At the end of the day, a viable and transparent exit strategy from the bailouts would require a redefinition of the “social contract” between Main Street, Wall Street and the government. It’s imperative that policymakers recognize that this “contract’s” current form, made up of often unsustainable commitments, does not provide a “silver bullet” to deal with the “elephant in the room” – the specter of economic depression, looming debt and incipient inflation.
Global Economic Security Discourses