Economy
2:00 am
Fri November 4, 2011

Europe's Debt Dominates G-20 Summit

Originally published on Fri November 4, 2011 8:20 am

Transcript

RENEE MONTAGNE, HOST:

And the political and economic drama in Greece this week has moved to a glamorous resort in the South of France. European Union leaders are gathered in Cannes as part of a meeting of the world's most important economies. The group of 20 would have preferred a broad agenda, but Europe's troubles have overshadowed everything else at Cannes.

President Obama is there meeting with EU leaders and urging them to resolve the financial crisis. NPR's Eric Westervelt is also at the G-20 meeting and joined us. Good morning.

ERIC WESTERVELT, BYLINE: Good morning, Renee.

MONTAGNE: So Europe is America's largest trading partner, therefore there is a lot at stake for the U.S. in helping Europe out of this debt crisis. Realistically, though, what can President Obama and the White House do to help?

WESTERVELT: Well, he has really few options, Renee. He's not coming with a big plan or a big pot of money. I mean he - on Thursday, President Obama mostly offered support and encouragement. He praised President Sarkozy and Chancellor Angela Merkel of Germany in their efforts to try to forge a solution for this debt crisis, which has dragged on for nearly two years. He encouraged them as well to more clearly define aspects of their latest rescue plan and how it will be implemented, especially on exactly how they plan to boost the power of their bailout fund. Eurozone leaders want to create a $1.4 trillion fund that will help insulate European economies if the debt crisis, you know, continues to spread from Greece and the smaller economies to the larger ones, especially Spain and Italy. And highlighting the concern about Greece and the debt problems, the president joined Sarkozy and Chancellor Merkel and other eurozone leaders late last night, we're told, well after, you know, the G-20's working dinner had wrapped up to discuss the way forward on the debt problem.

MONTAGNE: Well, you just mentioned Italy. And while all the talk these last days has been about Greece, I mean, the fact of the matter is, Italy is a much larger economy and it is also in big trouble.

WESTERVELT: That's exactly right. There's deep fear about this crisis spreading to Italy and expanding further. There are reports this morning, Renee, that Italy has agreed to let the International Monetary Fund monitor its economic reform efforts. Italy's prime minister, Silvio Berlusconi, has been under intense pressure to move very quickly on really a broad series of reforms, including very controversial issues, such as privatizing state-run Italian companies, radically reforming the government pension system, labor market changes to make it easier to fire workers. You know, these are all measures that are deeply unpopular at home. And Berlusconi, like his Greek colleague, is under mounting pressure to step down and hand power to an emergency government. Italy's government is in crisis. And really the whole issue of expanding the eurozone's rescue firewall is to try to better protect against the possibility that Italy's troubles will only get worse in coming months.

MONTAGNE: The G-20 meeting wraps up today. What will world leaders there have to show for it?

WESTERVELT: So far it appears they won't have very much, Renee. They've got collapsing European governments and a widening debt crisis that leaders - especially France's President Sarkozy, you know, was hoping to present a stable, united front and unveil, you know, their recently adopted rescue plan. They wanted to send a message of stability, that things are on the right track. But, you know, in fact, if anything, the debt crisis seems to have gotten worse during this meeting. We've had the Greek political drama that's thrown that rescue plan into doubt; there's skepticism Italy and its weak leader will make good on much-needed reforms. So no victory lap for Sarkozy, really, or really any other of the leaders of the world's 20 largest economies.

MONTAGNE: Eric, thanks very much.

WESTERVELT: Thank you, Renee.

MONTAGNE: NPR's Eric Westervelt joined us from the G-20 Summit in Cannes, France. Transcript provided by NPR, Copyright NPR.