November 7, 2011
The ink on the most recent European Union summit agreement was hardly dry before it became clear that it was insufficient. With investors now increasingly wary of Italy, the consensus is growing that the European Central Bank -- and the IMF -- will have to play an even greater role. But will it be enough? By SPIEGEL Staff
When government heads from Germany and the US get together, protocol usually calls for as much pomp as possible: honor guards, hymns, flag parades and the like.
But the tone was decidedly more businesslike at the G-20 summit in Cannes last Thursday. German Chancellor Angela Merkel and US President Barack Obama, together with US Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schäuble, met in a mundane conference room at the five-star Intercontinental Carlton Hotel. The group had serious issues to discuss.
Merkel reported on the results of a meeting held a day earlier -- during which she and French President Nicolas Sarkozy had told Greek Prime Minister Georgios Papandreou exactly what they thought about his (now cancelled) plans to hold a national referendum on the euro bailout package. Obama and Geithner, however, were not impressed. The euro crisis continues to worsen, the pair grumbled. It is time, they said, for Europe to finally take decisive action. The decisions taken at the European Union summit in late October were not enough, they complained.
In response, Merkel and Schäuble recited the long list of measures the Europeans had recently initiated. But in reality, they had little to offer in reply to Washington's analysis. The euro crisis, Obama warned, now threatens the global economy.
Too little, too late. That has been the global public's assessment of European efforts to rescue its currency -- for the last one and a half years. And there is every indication that it will remain that way, even after the most recent G-20 meeting. Indeed, concurrent to the meeting in Cannes, the euro zone experienced what was likely the most ridiculous week of events since the crisis began: a Greek referendum announced on Monday, a reversal on Thursday, a national unity coalition promised in Athens on Friday and Papandreou's resignation on Sunday. Things changed almost by the hour, it seemed. And there is still little reason for optimism.
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