Twelve years ago, the G20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major advanced and emerging economies to stabilize the global financial market. To tackle the financial and economic crisis that spread across the globe in 2008, the G20 members were called upon to further strengthen international cooperation.
History’s first sovereign default came in the 4th century BC, committed by 10 Greek municipalities. There was one creditor: the temple of Delos, Apollo’s mythical birthplace. Twenty-four centuries later, Greece is at the edge of the biggest sovereign default by a government with 353 billion euros ($483 billion) of debt — five times the size of Argentina’s $95 billion default in 2001
This crisis is affecting the government debt of (P.I.G.S) Portugal, Italy, Greece and Spain and the Euro itself is threatened.
IMF chief Christine Lagarde has called for countries to “act now and act together” to keep on the path to economic recovery. “We are by no means strangers, and we are linked by a common destiny,” she said at the meeting of the IMF and the World Bank in Washington.
“And these turbulent times must bind us ever closer together.”
Christine Lagarde, the boss of the International Monetary Fund, warned the chance of escaping a downturn was increasingly narrow. She said: “There are dark clouds over Europe and there is huge uncertainty in the US. And with that we could risk a collapse in global demand. There is growth. The bad news is that it is slow growth. The bad news is there are downside risks on the horizon – and they are piling up.”
Britain’s Chancellor George Osborne has warned that the euro zone has just six weeks to save the euro currency. “I think there is now quite a clear deadline set which is the Cannes summit in six weeks’ time,” he said in Washington DC this afternoon. “The euro zone has six weeks to resolve this political crisis.”
There is no political will in Europe and especially in Germany to sacrifice and pay the bills of Greece. European leaders are convinced that they can survive and “manage” a orderly default by Greece.
Banks in France and Germany scrambled to assure investors that they could survive their exposure to sovereign debt. Nobody knows what the total derivative exposure is, nor who the counter-parties are.
Worse, the debt crisis now engulfs Italy, which suffers from a stagnant economy and a staggering debt load of $2.5 trillion. Borrowing costs have hit painful levels for Rome, which has hastened to come up with an austerity plan to satisfy investors.
Any default by Greece would be completely dwarfed by a similar fate for Italy, whose size would overwhelm attempts by other members of the Euro zone to save it.
Hitler once pointed at the lack of political will of the 30 political parties as proof that a countries economic problems could not be solved by democratic paralysis. The I.M.F. and the U.N. and the G20 are again proving him right. We must accept that the coming economic ruin will give rise to the types as in the 1930’s, Hitler, Stalin, Mussolini, Tito, and Franco.
Rev 17 v 12. “The ten horns which you saw are ten governments who have not yet received a kingdom, but they receive authority as kings with the leader for a short time. Rev 17 v 13. “These have one purpose, and they give their power and authority to this leader.