Has Europe “done its part” on the Euro crisis?
France’s finance minister has declared that Europe’s recent steps to boost its internal firewall are enough–and that it’s time for the international community to respond with its own efforts: European leaders said they believed the €200bn increase in their fiscal rescue fund agreed on Friday would be enough to persuade non-eurozone countries that Europeans had ...
France's finance minister has declared that Europe's recent steps to boost its internal firewall are enough--and that it's time for the international community to respond with its own efforts:
France’s finance minister has declared that Europe’s recent steps to boost its internal firewall are enough–and that it’s time for the international community to respond with its own efforts:
European leaders said they believed the €200bn increase in their fiscal rescue fund agreed on Friday would be enough to persuade non-eurozone countries that Europeans had "done our homework" and lead them to supplement eurozone efforts by building their own global firewall against contagion.
François Baroin, the French finance minister, said after two days of meetings here with his European counterparts that "Europe has done its part", suggesting it was now up to other large global economies to contribute to an enlarged International Monetary Fund war chest.
Wolfgang Schäuble, the German finance minister, said he wanted to put an end to speculation that the fund would be increased any further, adding that the eurozone has "now given our contribution" and had lived up to its "global responsibility."
Sweden’s finance minister insisted that it’s now up to the IMF to put the Eurozone crisis to rest:
"We need to see a strengthening of IMF resources," Mr. Borg said. "There will be a lot of debate…but there must be a decision at the G-20 and IMF annual meeting on the upscaling of the resources. We are seeing a stabilization of the crisis but it would be strengthened further if we have a broader, wider and stronger firewall."
The United States and the IMF itself have welcomed the European moves. Japan’s finance minister called the measures "a big step forward." It is far from clear that the G20 states will now coalesce around steps to significantly boost IMF resources. Washington has said repeatedly that it will not contribute. Canada’s finance minister is reportedly unimpressed by the European efforts and opposed to new IMF funds. The BRICS, meanwhile, have recently linked new IMF funds to approval of voting-power changes in that institution (which are unlikely to be formalized in the near-term). European officials are convinced that they have done what the G20 asked; the G20 appears far less certain.
David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist
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