World leaders from Israel, Greece, Australia talk economy at Surrey summit
Three former international prime ministers this week described the shock of facing the 2008 global recession and how it served as a teaching moment moving forward.
Former prime ministers Ehud Barak (Israel), Julia Gillard (Australia) and George Papandreou (Greece) addressed a crowd of about 1,000 at the Sheraton Vancouver Guildford Hotel during the Surrey Regional Economic Summit on Thursday.
They outlined their countries' positions as the world economy ground to a halt in 2008.
Papandreou described Greece as the weak link in the European Union and the lightning rod for criticism.
During the crisis, he was getting calls from world leaders looking for assurances that his country would not default on its loans.
"They knew that if Greece went under, we could have a new global recession," Papandreou said. "That just shows how interconnected we were."
Greece was not a poor country, but more a mismanaged country, Papandreou said.
"Because of the crisis, we had to take very drastic measures very quickly," he said. "What happens when you do that, is you unjustly hurt the weaker parts of society."
On the other side of the world, Australia never actually went into recession.
Gillard said part of the reason Australia wasn't hit as hard is that it has extremely strong banks and no debt, which it used to lay out a strong stimulus package when it was needed.
"So we went in strong, and we're coming out strong," Gillard told the crowd.
That said, the nation was affected deeply by the global financial crisis, said Gillard.
"No one was immune," she said.
Every nation had to tend to its financial health, while meeting globally, particularly with the G20 nations.
Any government that doesn't believe a worldwide downturn will affect them is kidding itself, Gillard said.
"And the speed of it is faster than it's ever been as a result of new technologies and the way financial markets are integrated."
During the crisis, Australia had to offer guarantees on its banks.
"Not because there was any problem with our banks," but because consumers demanded that confidence, she said.
Israel, Barak noted, fell somewhere between Greece and Australia in the level of impact of the 2008 crisis.
"We had some worries and anxieties, but no real damage," Barak said, adding the country experienced 1.9-per-cent growth in 2009.
He said Israel is "more of a dinghy than a super tanker," so it was able to react quicker to the crisis. Like Australia, Israel also has a very conservative banking system.
That said, Israel was very worried about the state of Europe, which is the country's biggest trading partner.
He said the world is still in for a deep and long change in how financial institutions do business.
Barak said lessons learned include the absolute speed with which America responded to the crisis, and thereby minimized the damage, compared to Europe's relatively slow response.
In Greece, where austerity measures were causing huge public demonstrations, Papandreou said it was a difficult time to be a leader.
"Even though they are shouting against you, they are feeling deep pain because their pensions were cut," he said. "It was a shock, it was a real shock."
Leaders had to make the tough decisions and suffer the political costs, he said.
Gillard said the lesson of the financial crisis is there is nothing too far away to affect you personally.
"What's happening on your television screen coming from overseas one minute is sitting next to you… the next," Gillard said. "That is the lesson of the global financial crisis."
Papandreou agreed, adding Greece is on the rebound.
However, deep austerity measures throughout the rest of Europe have taken their toll, he said.
"Europe has been in quite a deep recession for the past few years," Papandreou said.
But he believes Greece will not only persevere, but will thrive in the coming years.
Barak said the world is entering into a second industrial revolution, adding most jobs will soon be done by robots and machines. The more advanced countries, he said, will have to figure out what to do with its population.
"It's a major challenge," Barak said. "When you get too close to the wall, it might be too late to turn or solve the issues."
Surrey's annual summit was opened by B.C. Finance Minister Mike de Jong, who highlighted details of the provincial budget.
Other speakers included Texas oilman and philanthropist T. Boone Pickens and an economic panel featuring Ken Peacock, Michael Goldberg, Andrew Ramlo, and Shauna Sylvester.
Speakers' fees are paid for by the summit sponsors and ticket sales.