Guardian
Editorial
May 18, 2012
History suggests that the last place one would look for the resolution of a crisis is a summit of world leaders. Yet every so often summits can pave the way to a sea change in policy. The G20 meeting in London presided over by Gordon Brown in the spring of 2009 agreed an impressive-sounding trillion dollar boost to the world economy, but more importantly sealed a deal between the leading powers that they would each spend more until the spectre of recession was warded off. Similarly, the first G20 summit that David Cameron attended as prime minister in 2010 marked the point at which Europe and America parted ways on economic policy.
Two summits, two opposing results, yet each hugely significant. Let us hope that the G8 meeting kicking into gear in Washington this weekend is of a similar rank of importance. Certainly, the situation Mr Obama and his colleagues confront is potentially even more grave than the one they faced in those early months after Lehman Brothers collapsed. However amazing it is to imagine, it is not hyperbolic to say that the euro stands on the verge of a death spiral – and that there are precious few opportunities left to pull it back from the brink. It is not simply the very real prospect of Greece leaving the single currency; it is also the palpably distressed condition of Spanish banks (as suggested by this week's credit-rating downgrade for 16 of them, and the collapses in their share prices), and of so many others across Europe; plus the long-standing issue that Spain and Italy and a number of other countries are now finding it increasingly difficult to get the loans they need from financial markets.
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