At the gloomy IMF/World Bank meetings in Washington this weekend, everyone seemed to agree on one thing, and one thing only. The European debt crisis is now by far the most urgent matter facing the world economy. Not only has it already taken the eurozone to the brink of renewed recession, but it threatens to envelope the rest of the world as well. ”The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally”, said Tim Geithner, US treasury secretary. He is right. But there is still no unanimity on what exactly should be done to take take this catastrophic risk off the table.
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