Greece and euro crisis to dominate G20 meeting; if Greece goes bankrupt, it will trigger a domino effect, say experts; top business leaders call for development of a "multi-polar" global currency system with more emphasis on Chinese yuan; suicide bomber attacks NATO supplier in Afghanistan; US Fed lowers growth expectations for next two years; and more
Top of the Agenda: Greece, Euro Crisis to Dominate G20
As world leaders assembled in Cannes for the G20 summit, German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greece (WSJ) it would not receive any further EU financing until it decides whether it will stay in the eurozone.
The two European leaders made clear that saving the euro (DerSpiegel) was a more urgent priority than saving Greece. "We will not allow the euro to be destroyed," Merkel and Sarkozy said.
The move followed a surprise decision by Greek Prime Minister George Papandreou to put a referendum to the Greek public over a new debt rescue plan agreed on by EU leaders last week. Greeks are adamantly opposed to the strict austerity measures mandated by an EU bailout, suggesting the referendum could be rejected in an early December vote. Sarkozy and Merkel indicated that such an outcome would amount to a rejection of the single-currency zone (DeutscheWelle).
At the same time, Greek Finance Minister Evangelos Venizelos publicly opposed Papandreou (NYT) over the referendum, exposing divisions in the government and signaling that Papandreou may not survive a parliamentary vote of confidence on Friday.
German economists are warning of disastrous potential consequences for Europe if Greek voters reject a referendum on the euro rescue package. The country would go bankrupt, they argue, and it would trigger a domino effect. At the same time, politicians would finally be required to develop a worst-case scenario, writes Der Spiegel's Christian Teevs.
Sarkozy and Merkel's strong rhetoric is a game of poker, an attempt to convince Greeks that the EU has all the cards, while the Greeks have just a pair of deuces, says the Economist.
G20 leaders will be tested to act on sovereign debt crises and potential global economic upheaval. CFR's Stewart Patrick says a proper response would be for leaders to follow their own promises from previous summits.
B20 Recommends Greater Role for Yuan
The B20, a group of top international business leaders meeting in Cannes alongside the G20 summit, called for the development of a "multi-polar" global currency system (WSJ) that would see a greater role for the Chinese yuan. The B20 urged China to allow its currency to appreciate.
The aftermath of the Great Depression saw a burst of competitive currency devaluations and protectionism that undermined confidence in an open global economy. As countries recover from the financial crisis today, they need to heed the lessons of the past, writes Liaquat Ahamed in Foreign Affairs.
Meanwhile, China said it would not commit (BBC) to investing in Europe's firewall fund, meant to prevent further eurozone sovereign debt contagion, until it is clear whether Greece will be staying in the eurozone.
Suicide bomber attacks NATO supplier in Afghanistan
US Fed lowers growth expectations for next two years