as the sdrm is a more debtor - friendly mechanism, it could induce more fiscal discipline, strengthening the financial markets early warning function. in my opinion, this is not a secondary aspect. the key to an efficient approach to preventing sovereign distress lies in strengthening market pressure while also making it operate more gradually than is usually the case. an example is the cf. reinhart, rogoff and savastano ( 2003 ). cf. giordano and tommasino ( 2009 ). greek crisis. the spread between 10 - year greek and german bonds was less than 30 basis points in 2007. it widened to about 150 at the end of 2008 in the aftermath of the lehman brothers collapse and then fluctuated between 100 and 250 basis points until the beginning of this year. after that it skyrocketed, surpassing 900 basis points in the summer, and only in recent weeks has it fallen back somewhat to below 700. of course, any institutional reform that forces governments to become more sensitive to the warning signals coming from financial markets is welcome. with the stability and growth pact ( sgp ) the eu decided to use fiscal rules rather than market constraints, which were considered ineffective and slow in imposing fiscal discipline. as early as 1989, the delors committee had remarked that : “ the constraints imposed by market forces might either be too slow and weak or too sudden and disruptive ” 4. a solid fiscal framework can improve budgetary coordination over time by removing the built - in bias towards fiscal profligacy that is often attributed to democratically elected governments. a medium - term fiscal framework is particularly important, especially in the current situation, which requires credible plans to anchor expectations and, at the same time, a degree of flexibility in implementation so as not to hamper economic growth. however, it does not follow from this that market forces necessarily have to work only ex post and continue to be “ too slow and weak or too sudden and disruptive ”. we must strengthen “ gradual ” market pressure. for that, i believe having pre - defined procedures for debt - restructuring and a well - designed crisis management framework would help greatly. defaults are certainly “ unnecessary, undesirable, and unlikely ”, as cottarelli et al. ( 2010 ) assert. but we should not only be ready in case they take place but also have institutions capable of conveying to the market the message that they are in fact possible. the sovereign debt crisis and the institutional setup in the eu i

of the asian economy will be similar to that of the pre - enlargement eu. in the first half of the 2020s, it will match that of the three north american countries. picturing the world economy in 2040, asia's share in world gdp is forecast to be 42 %, while the shares of north america, europe, and other regions are expected to be 23 %, 16 %, and 20 % respectively. meanwhile, in terms of per capita gdp, as of 2003 asia recorded an average of $ 2, 400 - less than one - tenth of the average $ 29, 000 in north america and $ 27, 000 in europe. by around 2040, however, this difference is likely to be greatly reduced with asian per capita gdp being expected to be one - fourth of the figure in north america or in europe. looking at the big picture by country, in terms of overall national gdp, china is forecast to overtake japan by around 2020 and be on a par with the us by approximately 2040, to account for about 1 / 5 of global gdp. india would overtake japan by about 2030, and by 2050 or so is projected matching europe's 12 % global gdp share. by about 2040, korea's share in global gdp is forecast to have increased slightly to 2 % from 1. 7 % in 2003, while that of japan, due to its relatively slow growth, is estimated to have shrunk to about half its current 12 % share. in terms of per capita gdp, by around 5 / 6 2040, china is expected to be 1 / 4 of the figure in the us or in japan, and 1 / 3 of that in korea, while indian per capita gdp is, like today, estimated to be half of the figure in china. 3. the effect of the rise of the asian economy on the world economy how then will this high growth of the asian economy influence the world economy? it is already having a big impact on the global economy and this will increase in the future. this is because asia can offer an inexhaustible supply of labor to the world economy, which is rapidly integrating under the influence of information technology development and economic openness. a vast market that was once self - sufficient is joining the world economy. a number of effects are expected to arise from the integration of the asian economy with the open world economic order. first of all, labor costs will be reduced. with the