August 28, 2007 (LPAC)--Italian Senator Mario Baldassarri, Vice-Minister of Economics and Finance from 2001 to 2006, stated in an interview with EIR that the real crisis goes well beyond the question of mortgages, and has to do with the structure of the real economy. Baldassarri said, "the high-risk, or sub-prime, mortgages which everyone is talking about, are only the tip of the iceberg, in the sense that the real issue is the U.S. imbalance, the imbalance of the global economy."

Indicating the U.S. current account deficit as "the mother of all problems," which only continues to exist because China finances it, the Senator said that in addition to the emergency interventions by the central banks, "the real answer, in terms of government intervention, is a readjustment of the global economy... Apparently, America is growing, China is growing, and Europe is sleeping. But this growth has feet of clay. We need to reverse the situation... America needs to grow, Asia needs to grow, and Europe needs to grow much more, based on an international monetary system and exchange system which is compatible and reflects the performance of the real economies."

Regarding Lyndon LaRouche's proposal for a New Bretton Woods, Baldassarri said, "We need a new governance. Call it a New Bretton Woods, or whatever you want. The world has changed, and we can not have a structure of international monetary and financial institutions which reflects the old world which no longer exists.