There was a palpable air of pessimism in the plush Mariott Wardman Park Hotel in Washington this week.
For delegates, the annual meeting of the International Monetary Fund and the World Bank is normally considered a bit of a junket - a time to renew old contacts and shoot the breeze. But this time there was real work to be done.
The hotel, set beside Washington's zoo, was - as ever for the annual meeting - filled to the brim with visiting delegations from countries all over the world. But the frenetic undercurrent - where room-service sandwiches for ministers could take well over an hour and sniffer dogs roamed freely - seemed apt for a meeting where many of the participants were clearly uneasy.
One thing is clear. The global economic crisis now has the full attention of the world's bankers and politicians. Most EU delegates, civil servants and politicians, as well as bankers, professed surprise about the degree of pessimism prevalent throughout the private sessions. And many made disparaging remarks about the extent of "platitudes" emerging in the official speeches.
Behind the scenes, fears about the economic outlook had officials working flat out. Most of the discussion is carried out behind the scenes, under the auspices of various committees. Such was the pace that many delegates were complaining of exhaustion.
There was no mistaking the pace of activity. Appointments were routinely missed as it could take up to 20 minutes to simply travel from the lobby to delegate rooms on the sixth floor, with multitudes battling for places in the overcrowded lifts. A messaging system with hundreds of names missing only added to the confusion. So much for an organised drive to save the world economy. The week ended with plenty of ideas floated and proposals drawn up to improve the workings of the international financial system, but with few firm conclusions on what should be done next.
Many put a brave face on it, saying that the IMF could never have been expected to come up with any detail on reforming the world's financial system in a few days, but that at least there is now a map showing where to go and indeed a consensus that something needs to be done.
European ministers and central bankers and particularly the Bundesbank president, Mr Tietmeyer, appear to have left Washington feeling less optimistic than when they arrived.
A key concern is that at a time when clear political leadership is needed to chart a course forward, none is emerging. "It is like a plane with no pilot," one banker observed. And indeed that would appear to be true.
President Clinton is otherwise engaged. While most give him credit for actually turning up, they say he cannot be expected to focus on the world economy with the impeachment hearings still hanging over him. In Europe, meanwhile, there is no one politican taking the lead. For many years German Chancellor Helmut Kohl so dominated the stage that his departure has left a vacuum.
The formidable head of the Bundesbank, Mr Tietmeyer, could have been a candidate to replace him in putting the German view of what should be done, but insiders say he is approaching retirement and, in any case, was so close to the defeated Dr Kohl that he would not now have the credibility to take a lead role.
The British, it appeared, were totally caught up with domestic worries, such as the possibility of an interest rate cut, to make much of a contribution to the debate. And so far neither the French or Italians have made much of a play.
The Japanese, too, are out of the frame, not least because of the scale of the problem in their own country and the length of time it is taking to sort it out. There are still fears that deflation could be on the cards in Japan. As Dr Michael Somers, chief executive of the National Treasury Management Agency, pointed out here, 10-year bond yields are still less than 1 per cent, which is pointing to a possible fall in the value of real assets.
He added that perhaps what Japan needed was a new approach which would allow Japanese consumers to go out and spend again, as well as some sort of a bailout for its banks.
In Europe, it is among the Germans more than any other European group that pessimism is most widespread. They remain anxious about Russia. While German sources say most of the attention has now turned away from Moscow, especially as the US now has Latin America to consider, it is in Russia where there is a huge potential for geo-political unrest. The mere idea of food shortages this winter is enough to strike terror into the hearts of the most hardened German banker. The bankers are also looking at the new German government. While they accept new Chancellor Gerhardt Schroder as a pragmatist they are far more worried about the man likely to be his finance minister, Oskar Lafontaine, who is seen as being more doctrinaire - and a big spender. Also, they remain worried about the policies that the Greens will push.
Many German banks have a huge exposure to Russia and there are fears that a further collapse could put pressure on balance sheets. That would not be good news for any stockmarket or bank in Europe, particularly on the eve of the single currency. Irish banks should not be in the same danger given their very small exposure to proprietary trading risks and strong domestic balance sheets. Nevertheless, Germany is the key engine of economic growth across Europe and if there is a downturn there it will be hard for us to emerge unscathed. Our trade links are big and growing, there are large numbers of German banks in the IFSC. Also, we will be inextricably linked from the creation of the single currency on January 1st. The Americans, meanwhile, are increasingly worried about matters in their own back yard. They genuinely fear a credit crunch - where banks get into such difficulty that they cut back heavily on lending - particularly if the contagion spreads to Latin America.
Amid all the gloom, there is also a recognition that Ireland itself may be an oasis of stability. According to Dr Somers, many international banks recognise that we still have the highest growth rates in Europe and they believe that the fundamentals of the economy here remain strong. Unless there is an extremely severe downturn, prospects remain good, according to Minister for Finance, Mr McCreevy. But it will be some time before the international outlook - and its likely impact on Ireland - becomes clear.
