As the global financial crisis deepens, European leaders are making a virtue of big government and state intervention. This is a dangerous path to take. Corporate bail-outs beyond the banking industry may now be an inevitable consequence of decisions to save the banks and, in the US, to lend billions of dollars to, say, the automotive industry. The siren calls should be resisted.

Some European Union leaders affect to believe the crisis has ex­posed the failures of US-style free markets and justifies a return to the state’s historically strong role in setting European economic policy. Their response has struck a popular chord. Italy’s Silvio Berlusconi basks in media adoration for his state-sponsored rescue of Alitalia, the collapsing airline, and promises of help for carmakers. Nicolas Sarkozy, France’s president, advocates creating European sovereign wealth funds to save companies that are vulnerable to takeover by non-European predators.