PARIS - as brothers in arms, United in the fight but split in peace, Europe and the USA, the depression in 2009 jointly fought had started to begin voicing disagreement in 2010 and 2011 with divergent positions on macroeconomic policy. The price of divergence might be steep: Although the worst is over, effective policy coordination is still needed in a time when the rebalancing of global economy, such as the G-20 has demanded far from is reached.
The transatlantic divide is obvious in terms of monetary policy. In November last year broke the US Federal Reserve's decision to start a new cycle of "quantitative easing" (purchase of treasuries by monetary creation) fierce criticism in Europe. While the European Central Bank was also government bonds purchase since last spring has the amount is relatively small (70 billion euro, compared to the Fed-600 billion dollar program) and to only members of the troubled euro with special care to avoid helping the impact on money supply.
As regards fiscal policy, a similar divergence has appeared although less acute. The December European fiscal strict shifted to, Congressional extended for two years the tax cuts of George W. Bush - initiated, interpreted almost everyone as a further efforts to increase the U.S. economy. True fiscal constraint in Germany is more cautious than official rhetoric would suggest. But overall, Great Britain and the euro area clearly moved towards cost-cutting measures, the United States still very reluctant to look at.
In Europe, this divergence is often attributed to what French President Charles de Gaulle, used to called America's "exorbitant privilege": that makes print the most important international reserve currency. This statement is only partially satisfactory. Yes, China reserves in dollars pile. But no one forces you, and US much stronger renminbi would prefer. Emerging market countries could invest in euro if only you were such cash as U.S. Treasury bonds - is offered is the current debate on the proposed creation of "Eurobonds." And, while countries such as Greece and Spain suffer market restrictions, except in Northern Europe.
A second interpretation of the transatlantic gap is that both directives reflect the differences in their situation. This is clearly the case with labor markets and unemployment: American companies have recession with massive layoffs, respond as European businesses, with the exception of the Spanish companies, but not of British companies - have done their best to hoard work.
As a result, productivity in Europe has stagnated since 2007, while it has improved more than six percentage points in the United States. Another consequence is that the US unemployment rate is close to post-war peak and will remain much longer high. Your benefits after 99 weeks making slower unemployed workers in the United States lose the political imperative for macroeconomic policy much more than in Europe, where unemployment rose and benefits are generous. As the economist Joseph Stiglitz puts it, America's welfare state is the Fed monetary policy, first and foremost.
There is also a third, more subtle reading of the EU-USA-split, has to do with convictions. In the view of most Europeans the soil that has been lost can be restored, or very little of it - none. So, because supply has shrunk, dangerous for the Central Bank or the budget over stimulate demand about. And because tax revenues has not also be restored, the gap must be bridged by austerity.
Americans are on the other hand, convinced, that everything has been lost during the recent recession finally will be regained. Obama management says so as the Fed does (if also prudent), and to act on both. In other words, Europeans are pessimistic about what the future and are therefore reluctant to stimulate, while Americans are optimistic and willing, give a chance, keep each policy instrument to growth. So you remain ready to buy public U.S. debt investors divergence in macroeconomic policy still - at least.
Several consequences of this divergence: Difficulties in coordinating policy, since no agreement on the diagnosis; a very probably back to large US external deficits during Europe balance remains; and a weaker dollar, which, when the crisis in the eurozone fades.
All this could be difficult management the G-20, and the risks that obscured the question everyone should be consulted: global economy to manage the balance between advanced and emerging countries rapidly shifting.
Jean Pisani-Ferry is Director of Bruegel, an international economics think tank, Professor of Economics at the University of Paris Dauphine and member of the French Prime Minister's Council of economic analysis Copyright: project syndicate, 2011.
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