Despite the rhetoric of world leaders, the summit of the Group of Twenty (G20) has done very little to resolve the European financial crisis which is threatening global economy.
The problem remains that they are trying to engineer financial solutions for a problem that needs significant change in social and economic policies in Europe. And Europe is not ready to make those changes.
In a breath-taking shirking of responsibility, the European Union Commission President, Jose Manuel Barroso, insisted the origins of the Eurozone crisis lay in the “unorthodox policies of American capitalism”. While the sub-prime loans debacle in the US did spark the financial crisis, if Europeans had been responsible in their spending and debt accumulation, they would have been able to better manage the consequences, as did countries like Germany and China. The reality is that the crisis forced investors to look at the finances of many European countries and they did not like what they saw. Rather than bemoaning the fact that they can no longer live off loans from other nations, Barroso should be pushing for urgently-needed, far-reaching economic and fiscal reforms in Europe.
Developing countries have offered to boost their commitment to the International Monetary Fund to help it contain the crisis, not bail Europe out. The G20 will also try to cut the cost of borrowing for those Eurozone countries who have unsustainable debt burdens. But, until Europe’s leaders and its people take responsibility for its dilemma, there is no real solution in sight.