The start of 2009 was not overly promising and we do not know what the rest of the year will bring. Nevertheless, we should bear in mind that negative growth rates of 2% to 3% – as forecasted for most major economies – mean that there is still 97% to 98% of last year’s economic activity happening this year. In turn, this activity level will, despite all the difficulties, also result in new opportunities for companies to do business across international borders.

The emerging refocus on the real economy is an important development in this context, as it will help us through the downturn. At the same time we should not forget that we need finance and financial products to oil the wheels of trade and that, despite an apparently necessary adjustment in the overall regulatory framework, free trade needs open markets and freely flowing capital.

It is now the urgent task of governments to design a viable new framework. In doing so, they must understand their role as custodians of the market, which means that any new regulatory system needs to be strong enough to withstand pressure from interest groups – be they from the public or the private sector. For this to happen, governments have to become more confident and better equipped as, with the benefit of hindsight, one could argue that the lack of good governance from the public sector in the past is one of the key reasons for the current problems.

Unfortunately, not all governments will be able to live up to this task and instead will continue to throw good money after bad. This will only prolong the current crisis as the necessary adjustment in behaviour is postponed. The German government was one of the more hesitant ones with regard to designing huge spending packages. It was criticised for this but in my opinion such cautious behaviour will pay off in the longer term as it avoids creating a massive burden for future generations.

Especially in light of ageing populations in Europe we have to be careful not to limit the options for the generation that has to ‘defuse’ the demographic time bomb in the decades to come.