European business leaders are scared. For all the brave words and fine talk that the worse may soon be over, industrialists and bankers gathered last weekend at their annual get together on the banks of Lake Como did little to disguise their overriding pessimism.
"Economists may be pragmatic and sober but the financial markets have gone out of control," said a Paris-based investment banker.
The signals from around the world suggested that industry had to brace itself for "not an easy season".
Wim Duisenberg, the president of the European Central Bank, said the slowdown in the US and the rest of the world had been deeper than expected. Europe, too, was growing less than expected and below the earlier 2-2.5 % estimate. Next year, growth was unlikely to top that range.
Ernst Welteke, the Bundesbank chief, warned that any easing in budgetary discipline in response to the current difficulties risked making it harder for the ECB to lower interest rates...
