June 21st, 2012
08:39 AM ET

Did the G-20 help the eurozone?

Editor's note: Christopher Alessi with the Council on Foreign Relations interviews Jacob Funk Kierkegaard, a senior fellow at Peterson Institute for International Economics, for this look at the eurozone and G-20's possible impact. Read the original post here

The eurozone sovereign debt crisis dominated the G20 leaders' summit in Los Cabos, Mexico, June 18-19, as the United States and other G-20 members struggled to secure Europe's commitment to a concrete timeline for further political and fiscal integration. "The United States and the G20 as a whole have very limited leverage over the intra-euro area political process of integration," says the Peterson Institute's Jacob Funk Kirkegaard. Still, Kirkegaard applauded the euro area's public and "detailed commitment" to banking sector integration and reform, saying "quite far-reaching announcements on this issue" should follow the June 28-29 European Council summit.

What were the main takeaways of the summit?

The two key takeaways are: first, the additional commitment of funds to the IMF by the large emerging markets, which indicates that they have accepted to continue a longer-term process of IMF quota reform, despite the Obama administration's inability to get Congressional approval for the 2010 agreement before the October 2012 deadline. Secondly, it is the detailed commitment of the euro area, which "will"–rather than intend, or should–"take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks."

What concrete steps, if any, did the United States and other G20 countries convince Europe to take to more forcefully tackle the eurozone sovereign debt crisis?

Little. The reality is that the United States and the G20 as a whole have very limited leverage over the intra-euro area political process of integration. The detailed commitment to banking sector integration, however, is a positive.

What's next for Greece now that it has formed a new government and agreed to abide by its EU-IMF bailout agreements?

The Greek government will get the political commitment to ease austerity at the coming European Council meeting next week, and the imminent troika [Greece's international creditors--the European Commission, European Central Bank, and International Monetary Fund] visit will hammer out a revised bailout program, tweaked mostly at the margins though.

A Greek boost for the euro

What are EU leaders doing to address the worsening situation in Spain, highlighted by rising government bond yields?

The urgency of banking sector integration is clearly driven by events in Spain, and we should expect far-reaching announcements on this issue at the upcoming European Council [meeting]. Provided that there is the political commitment to integrate euro area banking sector regulation (e.g. a handover of sovereignty), it is probable that bond market interventions in Spain and Italy will resume by the ECB and/or the European Stability Mechanism or the European Financial Stability Facility [the eurozone's rescue funds].

Opinion: Clarity about austerity

What's the relevance of an informal organization like the G20 in alleviating the eurozone situation and other global economic crises?

[The G20] is quite useful in an acute crisis to coordinate global policy interventions. Yet, absent an acute crisis–like in early 2009–the G20 cannot independently make a difference for global policymaking. Its principal benefit in 'normal political times' is therefore in the informal meetings among heads of state at the sidelines–this time symbolized by the announcement of Mexico and Canada joining the Trans-Pacific Partnership [trade] negotiations.

G20 Communiqué, June 2012

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Topics: Diplomacy • Economy

soundoff (38 Responses)
  1. JAL

    Longterm disappointment means no-confidence.

    June 21, 2012 at 8:51 am | Reply
  2. j. von hettlingen

    The only person who had reaped success at the G-20 summit in Mexico was Christine Lagarde. She had been able to raise funds for her IMF, which now has over $400 bn available for crisis. With $40 bn China had contributed 10% of the required funds and the other BRCIS nations $10 bn each. China regretted that the U.S. "is not willing to give a hair". As the E.U. had contributed $200 bn. there were fears that the funds would go mostly to Brussels.

    June 21, 2012 at 12:42 pm | Reply
  3. Razzle Dazzle

    G20 is a bunch of clowns who can't find their beehinds with both hands.

    INDIA:::: Some Alarming Statistics: (Source: UNDP)

    • 1/3rd world’s poor is in India. It also has a higher proportion of its population living on less than $ 2 per day than even sub-Saharan Africa.
    • 828 million people or 75.6% of the Indian population is living below $2 a day. 42% of the population is living below the new international poverty line.
    • 33% of the global poor are Indians. Sub-Saharan Africa considered the world’s poorest region is better than India.
    • 41.8% of the rural population survive with monthly per capita consumption expenditure of Rs447 ($7)on essential necessities like food, fuel, light and clothing

    June 21, 2012 at 12:56 pm | Reply
    • Razzle Dazzle

      How can they help the world when they can't even help themselves !!!!!

      June 21, 2012 at 12:59 pm | Reply
    • spd

      you are a true paki...keep it up bro!!!!

      June 21, 2012 at 2:56 pm | Reply
      • Jacob X

        New, More Dangerous Hindu Extremist Groups Emerge in India

        Christians concerned as rightwing factions splinter to form militant outfits.
        PUNE, India, October 29 (CDN) — After more than a decade of severe persecution, India’s Christian minority is growing increasingly concerned over the mushrooming of newer and deadlier Hindu extremist groups.

        Gone are the days when Christians had to watch out only for the Vishwa Hindu Parishad (World Hindu Council) and its youth wing, Bajrang Dal, which are closely linked with the most influential Hindu extremist umbrella organization, the Rashtriya Swayamsevak Sangh (RSS). With voter support faltering for the RSS’s political wing, the Bharatiya Janata Party (BJP), moderate and extremist sections within the Hindu nationalist movement are blaming each other, and militant splinter groups have emerged.

        Claiming to be breakaway factions of the RSS, new groups with even more extreme ideology are surfacing. The Abhinav Bharat (Pride of India), the Rashtriya Jagran Manch (National Revival Forum), the Sri Ram Sene (Army of god Rama), the Hindu Dharam Sena (Army for Hindu Religion) and the Sanatan Sanstha (Eternal Organization) have launched numerous violent attacks on Christian and Muslim minorities.

        June 22, 2012 at 12:29 pm |
    • Liddy

      Wonder what this country is doing in G20? They should be on D50 (developing country) roster.

      June 22, 2012 at 1:27 pm | Reply
  4. Ernie Haas

    Can the G100 please rescue G20. LOL

    June 21, 2012 at 1:00 pm | Reply
    • Hadden

      Good one!

      June 22, 2012 at 1:28 pm | Reply
    • Jacoby Colatello

      Reverse engineering....lame helping the blind !!! Got it .

      June 22, 2012 at 1:36 pm | Reply
  5. Say it As You See It

    These G20 buffons can't even do a drug intervention in Afghanistan how the heck can they maneuver a bond market or deriavtive intervention !!!

    Indian States Poorer than African nations: UNDP

    According to the new measure called the Multi-dimensional Poverty Index (MPI) developed by UNDP acute poverty prevails in eight Indian states which includes Bihar, Uttar Pradesh and West Bengal. They account for more poor people than in the 26 poorest African nations combined.

    An analysis by its creators reveal that there are more than MPI poor people in 8 Indian states (421 million in Bihar, Chattisgarh, Jharkhand, MP, Orissa, Rajasthan, UP and West Bengal) than in the 26 poorest African countries combined (410 million).The MPI supplants the Human Poverty Index which had been included in the Annual Human Development Reports since 1997.

    June 21, 2012 at 1:04 pm | Reply
  6. Patrick-2

    The only thing that will help the Eurozone is the dissolution of the Eurozone itself! Unfortunately, the Aristocrats over there just don't care but then again, Europe has always been under the thumb of some Aristocrats throughout it's history.

    June 21, 2012 at 2:45 pm | Reply
  7. knowledgeable indian

    Why are all Pakistanis with their American-kinda names commenting so much..
    Dear pakis please take your cheap comment to your national paper..oh wait..do you guys have any national paper??
    Dont know if you guys were so good in pulling up analysis from various sources, then how come pakistan is a total failed state..
    And btw congrats for declaring your new national bird : US Air Force Drone!!!!

    June 21, 2012 at 3:00 pm | Reply
    • Razz Matazz

      The Aghori or Aghouri is a Hindu cult in India that is considered to have split off from the Kapalika order in the fourteenth century AD. They have cannibalistic rituals. The streets of northern Indian cities are littered with followers of this cult carrying a kapala, which is a cup made from a skull! These bizarre people will eat anything from rotten food to animal faeces. In order to achieve the highest citadel of enlightenment, the Aghori will perform horrendously crude rituals. The finality of their rituals is attained from eating the decaying flesh of a human.

      June 22, 2012 at 12:25 pm | Reply
    • Chuck

      "Good evening. My name is Henry Hanuman from Suppository Inc. USA call center in Bangalore !!! "

      June 22, 2012 at 1:24 pm | Reply
    • White on Rice

      What a stupid comment. Shame.

      June 22, 2012 at 1:39 pm | Reply
    • Mark L

      Go put off the fire on the burning building in New Delhi.

      June 22, 2012 at 1:40 pm | Reply
  8. Razz Matazz

    TOUGH TIMES IN INDIA: FOREIGN FIRMS PACKING AND RUNNING FOR EXITS
    “NEW DELHI/MUMBAI: Frustrated by a lack of opportunities in India, Germany's Fraport (FRAG.DE), the world's No. 2 airport operator, is shutting its development office in the country, the latest in a growing list of companies exiting Asia's third-largest economy.
    "When we came to India in 2006, we were actually extremely bullish about the market. We felt India had a lot of potential at that time," Ansgar Sickert, who heads Fraport's India operations, told Reuters in a telephone interview on Friday.
    "We were disappointed when none of these opportunities materialized," said Sickert.
    The list of companies to leave India includes telecoms carriers Etisalat ETEL.AD of Abu Dhabi and Bahrain Telecommunications Co BTEL.BH. Another firm, Norway's state-backed Telenor (TEL.OLhas threatened to pull out…..
    India definitely faces the threat of more foreign companies signaling an exit in the near future, as well as warding off new entrants. …

    June 22, 2012 at 12:24 pm | Reply
  9. Global Democratic Government Inc._ GDG ©

    We subscribe to the school of thought (as propagated by many commentators on this forum most prominent being @krm1007 ©™) that these G2/4/6/8/20 etc, IMF, World Bank and UN et al have lived their utility and should be undone.
    An elected world government should emerge based on democratic principles of one person one vote. There will be no veto powers. The center of seat will be based in developing countries.

    June 22, 2012 at 1:02 pm | Reply
    • Bucky

      Excellent idea. You have my vote so long as no "Veto".

      June 22, 2012 at 1:25 pm | Reply
    • White on Rice

      Count me in. World War 2, Cold War are over. Time for a new paradigm. Global Democracy !!! Love it. No more super powers.

      June 22, 2012 at 1:38 pm | Reply
    • Mark L

      Since everyone likes democracy so much...let's have one on a global scale.

      June 22, 2012 at 1:42 pm | Reply
      • Debby

        1.2 billion muslims want a caliphate.
        Nothing else matters to them.

        June 24, 2012 at 3:32 pm |
      • Betty

        @Debby...so what? This is about democracy not races or religion. Are you anti democracy?

        June 24, 2012 at 7:56 pm |
      • Erin

        Debby answered your question.
        With muzzies there cannot be democracy. The imams will not stand for people making up their own minds on anything.
        They will lose control and control of the masses is everything in muzzieland.

        June 24, 2012 at 10:09 pm |
      • Erin

        Debby answered your question.
        With muzzies there cannot be democracy. The imams will not stand for people making up their own minds on anything.
        They will lose control and control of the masses is everything.

        June 24, 2012 at 10:10 pm |
      • Erin

        Now I understand that muzzies need things repeated.
        Do you need to see it again?

        June 24, 2012 at 10:11 pm |
      • Pierre Le Chiffre'

        The vitriol from @Debby is unwarranted and lacks depth of thought to be on this forum. It seems to be from a frustrated hindu zealot struggling for words of expression.

        On a more positive note, let this expose be a free education for @Debby. It appears to me that Muslims are the fastest growing segment of world society today. As others are withering away the Muslims seem to be rising again with their contributions as was the case historically when they ruled India and Europe and left behind a legacy of science, art, architecture, culinary et al. One only needs to go to Spain and India to witness this. As immigrants, it is a good thing to be aware of your glorious heritage and be connected with it. The Italian immigrants do it as do the Germans, Polish, Jewish, Hispanic and many other cultures. What really pleasantly surprised me was what I witnessed in the Middle East. A tolerant society that has come so far in a few years. Most importantly providing job and economic opportunities to all, Hindus/Indians, Jews, Christians, Muslims, Europeans, Americans, Africans, South Americans, Chinese, and Russians etc. Never have I witnessed such openness and equal opportunities unless you go back to the times of Muslim rule in India and Spain. My conclusion is that the Muslims get it. They are striving to once again take their leadership role in the world order and take this civilization to its next level of excellence. The climb to success and progress is not a linear curve but a stochastic one. Let us join in wishing our Muslim brethren well and much success in their endeavors. If we can't help them let's not pull the rug from under them.

        June 25, 2012 at 9:30 am |
      • Pierre Le Chiffre'

        Make that @Erin also as they (@Debby) are identical Indian hindu twins hiding behind Christian names.

        June 25, 2012 at 9:32 am |
      • Marybeth

        @Erin not sure what you mean. It appears to me that democracy is on the rise in the Islamic world while "Experimental Democracy" is DOA in India...a predominantly hindu territory resulting in the creation of caste system that has caused social turmoil and economic inequalities.

        June 25, 2012 at 9:38 am |
      • Maria

        Seems like has dementia as repeating comments unnecessarily ! Lol

        June 25, 2012 at 9:42 am |
      • Maria

        Sorry ...got censored, I supposed...should have read:
        "Seems like @Erin has dementia as repeating comments unnecessarily. Lol"

        June 25, 2012 at 9:43 am |
      • Ian

        The joke's on you Maria.

        June 25, 2012 at 2:58 pm |
      • Jared

        She was just making sure you were paying attention Ian/Erin. Gotcha !!

        June 25, 2012 at 4:20 pm |
    • J.J. Jeremiah

      Hmmm. Come to think of it this idea makes a lot of sense. If we love democracy in countries let us have global elections and evolve a world government in lieu of UN. I am all for it. Let us get rid of hypcrisy.

      June 24, 2012 at 7:51 pm | Reply
    • Sammy

      Strong idea whose time has come.

      June 25, 2012 at 9:34 am | Reply
  10. Sadiq Sabzwari

    AN INDIAN SAGA
    HUMPTY DUMPTY: Had a great fall
    India is pretty much done. The bubble has burst. India is sliding downhill at supersonic speed. GDP growth has disappeared...the only growth left is the hair between their legs. Inflation is in the clouds and India has asked Pakistan to help out. Pakistan has opened up Wagah Border to help Indians with food/goods etc. The Indian Rupee has collapsed against US $. US owns India financially now. As of last week the Indian bourse also collapsed.

    June 25, 2012 at 9:45 am | Reply
  11. Abamidal

    anastrozole 1mg/ml – 30ml [url=http://coomrovfkts.com]arimidex anastrozole buy[/url] xjz anastrozole adverse effects

    November 25, 2013 at 5:02 am | Reply

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