PARIS (AP) — World leaders will try to understand how the global economy has swerved so horribly off its recovery track when they gather this week for a summit that will see a curious inversion of roles from previous meetings: Europeans will be asking developing countries in Asia and South America for financial help.
Though signs of an alarming slowdown in growth are everywhere — the U.S. is not creating enough jobs and China is struggling to cool down inflation without triggering a credit crunch — the old continent’s debt problems will take top billing at the summit.
As head of France’s year-long presidency of the Group of 20 meetings, Nicolas Sarkozy will scramble to show his peers gathered at the chic French Riviera resort of Cannes that Europe has gotten a grip on its debt crisis with last week’s grand plan to save the euro.
One of the main ideas behind creating the G-20 three years ago was to expand global economic decision-making beyond the North Atlantic axis to include more diverse countries. But this year’s G-20 summit, to be held Thursday and Friday, is all about old Europe. And instead of Europeans offering aid to struggling nations, as occurred in the past, now the Europeans are asking developing nations with big cash reserves — like China — for financial help.
Eurozone leaders, for their part, have preventively dodged questions on details of their latest euro rescue operation, saying last week that the mechanics won’t be settled until early December — almost six months after their previous plan was announced and then left to slowly go past its expiration date.
European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy last week pledged to carry out the new measures “rigorously and in a timely manner.”
“We are confident that they will contribute to the swift resolution of the crisis,” Barroso and Van Rompuy wrote in a joint letter to the G-20 leaders.
“Swift” may not be the right word after two years of faltering half-steps and missed opportunities. Meanwhile, European leaders must use the face time with colleagues from Brazil, Russia, India, China and beyond to drum up interest in the euro440 billion ($616 billion) European bailout fund. Increasing the fund’s firepower by getting cash-rich developing world countries to invest in bonds insured by the fund is key to the European plan’s success.
If recent comments by the head of China’s sovereign wealth fund are anything to go by, convincing outsiders of Europe’s investment potential will be a hard sell.