Germany continues to push austerity and reform
German Chancellor Angela Merkel gives a speech on June 14, 2012 at the Bundestag in Berlin, Germany.
David Brancaccio: Don't overestimate Germany's ability to fix Europe's banking and government debt crisis. That's from the German leader, Angela Merkel, ahead of a big meeting of the Group of 20 top economic powers. The summit's this weekend, the same weekend that voters in Greece choose a government that could determine whether their country stays in the Euro or goes.
Marketplace's Stephen Beard reports from London.
Stephen Beard: Germany is strong said Merkel, but don’t expect miracles. Our powers are limited. Merkel is clearly feeling the heat. The rest of the world is crying out for an end to Europe’s debt crisis.
President of the World Bank Robert Zoellick has joined the chorus. He told Marketplace Morning Report that Europe had signally failed to tackle the twin problems of government and bank debt:
Robert Zoellick: As Europe has moved to the brink each time, they’ve provided some liquidity often through the European Central Bank. But they haven’t been able to deal with those fundamentals, and as they’ve done so it’s always sort of a day late and a euro short.
This week’s long delayed bailout of Spain's banks has failed to stem investors fears. Spanish borrowing costs climbed again today. Analysts say the only real way out is if Germany stands behind the debts of other eurozone countries.
Don’t hold your breath, says Bob McKee of Independent Strategy
Bob McKee: The political complications of achieving that are great indeed and it’s no certainty that agreement will be reached and the debt crisis turned around.
Angela Merkel still argues that economic reform and austerity are still best ways to deal with Europe’s debt.
In London, I’m Stephen Beard for Marketplace.