October 8th, 2007; IIF, New Delhi :
Prof. Aman Agarwal, Professor of Finance and Vice Chairman, Indian Institute of Finance was invited to deliver the Plenary Keynote Address at the Economia Reale Conference at Sala delle Colonne (Italian Parliament) on Global Dis-Equilibrium, Growth and Europe on the 19th September 2007 by Senator Prof. Mario Baldassarri (former Vice Minister of Economy and Finance, Italy).

While addressing on the challenges before Europe, Prof. Aman Agarwal said, that he was happy to see that his suggestion of 1999 to formulate the European Constitution is finding place within Europe and European Institutions with the 1st draft of European Constitution submitted to the people in June 2004. He stressed the need for Europe to focus on global partnerships and interdependence to take care of challenges faced in last 4 years due to higher un-employment (i.e. blue & white collor workers), lower growth within the region, US recession, inflationary pressure within Europe leading to internal dissatisfaction with the integration process and the recent Fed Rate Cut by 50 bps. Prof. Agarwal highlighted that these issues are a matter of concern, as they may cause de-stabilization of the Global Financial Stability & Development.

Prof. Aman Agarwal re-emphasised the need to set-up a Fiscal Policy Board (as proposed in his work of 1999) to bring in equilibrium in the European Fiscal affairs leading to inflationary pressures in Europe. The Fiscal Policy Board would comprise of Ministers of Finance of EU member states as their board members and Secretary Ministry of Finance to be the Deputies. The role of the Fiscal Policy Board would be to stream line and develop a plan for smoothing the Fiscal Policy within Europe to avoid inflationary pressures and de-stabilzation of Europe and the integration process (as observed in India & USA). The suggestion was seconded by Dr. Jean-Paul Fitoussi, President OFCE-Parigi, France and other speakers at the forum.

Addressing the issue of Fed Rate cut by 50 bps on 18th September 2007, Prof. Agarwal outlined the crucial issues before the US and supported the cut. The Fed Cut would enhance consumption within US, specially in the Housing market, which has been falling extensively in the last 1 year. He also outlined that there would be no impact on EURO, unless the ECB intervenes. The intervention of ECB is natural, as the EURO has gained strength beyond the market expectations in a short span. The Fed Rate Cut gives ECB an opportunity to make an intervention to re-adjust the Euro-US$ price through adjustments in weights assigned within the EURO's basket of currencies.

According to Prof. Agarwal, regaining lost glory of mutual respect in jointly shouldering towards a peace loving harmonious growing global society is the demand of the hour. While speaking in the conference he stressed on better ties between India and Europe. Prof. Agarwal stressed the need to address some of the key issues before synerysing ties to improve confidence, maintaining positive outlook and realign political will for developing a progressive inter-regional focus for business, trade and societal interactions.

Other Prominent Speakers at the Conference were: Mario Baldassarri, Senator & Professor, University of Rome, ITALY (Introduction); Andrew Rose, Professor, Haas School of Business, University of California, Berkeley, USA; Jean-Paul Fitoussi, President & Professor, OFCE-Parigi, FRANCE; Marcello De Cecco, Professor, Scuola Normale Superiore, Pisa, ITALY; Paolo Guerrieri, Professor, Università di Roma La Sapienza, Rome, ITALY; Gustavo Piga, Professor, Università di Roma Tor Vergata, ITALY; Paolo Savona, Professor, Università LUISS di Roma, ITALY; Roberto Ippolito, Scuola Superiore di Giornalismo-LUISS, Rome, ITALY (Panel Coordinator)