Clash of the failed titans
The G20 meeting in Cannes exposed two harsh realities about the eurozone sovereign-debt crisis: that Europe’s leaders still do not have the answers, and they cannot rely on international help.
When, 24 hours behind schedule, José Manuel Barroso and Herman Van Rompuy gave a joint press conference at last week’s G20 meeting, they had all the appearance of rabbits caught in the glare of headlights.
A world-changing event such as the eurozone sovereign-debt crisis can transform politicians into titans, or can reduce them to flotsam, tossed on the tide of events, powerless, directionless, and hopeless.
The G20 summit in Cannes suggested, if it was not already suspected, which is to be the fate of these two figures. This gathering of global leaders was nothing short of a disaster for the eurozone, for the European Union, and for the idea of “Europe” that Nicolas Sarkozy, France’s president, said he was fighting for.
It was not just the presidents of the European Commission and the European Council who looked out of their depth. Sarkozy and Angela Merkel, Germany’s chancellor, both struggling to get a grip on the eurozone crisis but constrained by unpopularity and facing elections at home, proved to be some way short of titans as well. After their ill-tempered encounter with George Papandreou, Greece’s prime minister, on Wednesday night, they emerged to face the world’s media ashen-faced and uncertain. It was obvious to everyone that they did not have things under control.
Greece received its first bail-out back in May 2010 in a move that was supposed to be conclusive. However, 16 months on, Greece, which has a tiny economy in global terms, had somehow managed to hijack the November 2011 G20 summit. Quite an achievement for a country not even in the G20.
Incongruously, Papandreou surfaced smiling and waving from his dressing-down on Wednesday night. Perhaps he had already come to terms with his powerlessness. He returned to Athens to give a speech implying, but not quite confirming, that he was calling off his referendum, and then to face a confidence vote in parliament.
Greece is where titans were made and Europe’s civilisation created. It dominated the world then, and it dominated the G20 now. Its ancient rival Rome did its best to ruin things too. Silvio Berlusconi, Italy’s prime minister, behaving like the court jester as the country’s cost of borrowing spirals to ever higher record levels, was there, denying the enormity of the problem, as he clung selfishly to power. Chaos is a Greek word, but ego comes from Latin.
How fitting that the continent’s two ancient, most romanticised civilisations could bring Europe to its knees and inflict such humiliation while the rest of the world looked on. Sarkozy evoked Europe’s shared history and common identity when he ranted at the end of his failed summit on Friday afternoon, claiming that the eurozone was worth saving because it was the only way to save Europe. In the same breath he brusquely told a journalist from the UK that the British did not understand because they live on an island.
Whereas Europe once dominated the world, economically and politically, this G20 demonstrated that the power has irreversibly shifted elsewhere.
The eurozone was down on its knees begging for help. Its leaders thought they could persuade China to invest its spare billions. They thought that the rest of the world would increase the firepower of the International Monetary Fund, or show at least some interest in backing up the European Financial Stability Facility. But the rest of the world refuses to do so until the eurozone can prove it knows what it is doing. In this, the rest of the world is echoing the eurozone’s message to Greece and the other struggling economies: there are no blank cheques; money comes with conditions attached.
The G20 is ill-suited for such fire-fighting. Its initial purpose was to shape longer-term global policy decisions. It is a matter of deep humiliation for Europe that the annual gathering of the world’s most powerful leaders should be hamstrung by the inability of Europe’s governments to resolve a crisis.
But the humiliation is shared among Western leaders. Barack Obama cannot lead the US to Europe’s rescue either. The US’s own fiscal problems and dysfunctional political system disqualified him from taking the high ground in Cannes. And the US does not have the financial clout, let alone the will, to prop up eurozone countries. Obama, who admitted that the summit had given him a “crash course” in European politics, could not do much beyond remark about the eurozone that “having to co-ordinate all those different interests is laborious, but I think they’re going to get there”.
If these leaders do have any power left, it is only the power to block each other’s solutions. Their failure to rise above their own instincts for self-preservation has brought Europe even closer to financial disaster. Six weeks after Sarkozy and Merkel proclaimed that the G20 would act as the deadline for sorting out the eurozone’s crisis, the G20 has instead exacerbated the situation.
These leaders are not the titans that Europe needs them to be. Instead, their actions bear more than a passing resemblance to those in charge of the Titanic.
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