Euro’s successes undermined by ‘parochialism’

Financial Times
September 14, 2011

Bankers and policymakers sounded rising alarm over the eurozone’s travails on Wednesday, saying failure to co-ordinate economic policy threatened the world economy.

The Institute of International Finance, a global association of banks and finance houses, attacked European leaders for failing to grasp the impact of the crisis. Robert Zoellick, World Bank president, criticised an attitude of “muddling through” in Japan and the US as well as the eurozone.

In its traditional letter sent to ministers before the annual meetings of the International Monetary Fund and World Bank, which take place next week, the institute said the successes of the euro “are being masked and undermined by the parochialism and nationalism being exhibited in some instances”.

Charles Dallara, IIF managing director, said the delay and confusion caused by the lack of policy infrastructure in the eurozone had combined with a lack of leadership among the G20 grouping of leading economies to create a sense of drift.

“The process of global policy co-ordination, advanced steadily by the G20 in recent years, has been rendered largely ineffective,” Mr Dallara said.

More