It would be wrong to exaggerate Europe's sense of self-righteousness over Wall Street's fall. This week governments in Belgium, France, Germany, Ireland and the Netherlands all scrambled to bail out their troubled banks (see article), confirming how exposed Europe's economies are to knock-on effects from America. Even left-wing editorialists in France, quick to sneer at degenerate American capitalism, have tempered their glee. "There would be something comical, even pleasurable, in watching the frenetic agitation of the banking world", wrote Laurent Joffrin, editor of Libération newspaper, "if millions of jobs were not at stake, not to mention the economic balance of the planet."
A common thread can nonetheless be detected in European responses to America's troubles. It goes as follows. We always knew that unbridled free markets were a mistake, yet we were derided for saying this; now we are all paying the price for your excesses. In the face of popular consternation at capitalist decadence, the activist state is back in fashion—and we Europeans are taking credit for it.
Yet there are doubts whether this will actually alter any country's policies. There has been much Schadenfreude about America in Germany, for instance. The latest issue of Der Spiegel, a weekly, shows the Statue of Liberty with her torch out and the strapline, "The price of arrogance: an economic crisis is changing the world". Mr Steinbrück has called for the civilising of financial markets. His boss, Chancellor Angela Merkel, has cited the crisis as proof that she was right at successive international meetings to demand tougher regulation of hedge funds and financial markets—and that the Americans and British were wrong to resist it. Yet she is not going to abandon the free market. The slowing of reform in Germany is mainly caused by gridlock within the grand coalition and the approach of the next federal election.
A bigger test still is France, home of Colbertism and Gaullism, where l'Etat has both a capital letter and a cherished place in the popular imagination—as well as a heavy claim on the taxpayer's purse. Judging by his recent declarations, the centre-right Mr Sarkozy has taken a decidedly leftward turn. In the space of three days, he twice laid into free-market capitalism. "Laissez-faire is finished," he announced in Toulon. "The all-powerful market that is always right is finished."
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