Last week’s G20 meeting marked the demise of the eurozone’s three-year effort to save itself. The monetary union will be saved, but not from the inside. Its survival will come at the hands of the International Monetary Fund and the emerging economies.
Europe’s weaknesses were on full display at the meeting in Cannes. Mr Sarkozy did not hesitate to upbraid his Greek and Italian colleagues. Italy’s premier Silvio Berlusconi displayed a further retreat from reality. Ms Merkel, as usual, said very little. The US said even less. The decline of America’s economic power was patent.
The eurozone urgently needs an infusion of financial support from beyond the eurozone, channelled through the IMF. We are at the end of an era, not only in Europe, but globally. The rising economic powers have financial surpluses, economic growth, and high stakes in global stability. They have the means to provide new bulwarks of the multilateral system. The traditional powers will have to make more room for them at the head table.