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Berlin - European leaders dealing with the sovereign debt
crisis have done too little, too late, outgoing World Bank chief Robert
Zoellick said, warning that Europe risks losing influence and developing
nations now face increasing market uncertainty.
In interviews with European publications this weekend,
Zoellick urged Europe to act quickly. He spoke on the eve of an election in
Greece on Sunday that has financial markets on a knife edge.
“European politicians always act a day late and promise one
euro too little. Then, when it gets tight, they add new liquidity,” Zoellick
told Germany’s Der Spiegel magazine in an interview published on Sunday.
While that bought time, it did little to address the eurozone's
structural problems, Zoellick said.
“It’s no longer so much about which model the Europeans
choose. They should just decide on one. Quickly.”
“If Europe continues to falter, it will lose global
influence. European leaders must be aware of that,” Zoellick said, adding that
Germany should take a leadership role and keep pushing for fiscal and
structural reforms.
He said that while a Greek exit from the euro would have
enormous consequences, Europe should not allow itself to be held hostage by
Athens.
“That feeling of uncertainty should not lead to Europe
giving Greece everything that the government there wants.
"If the Greek
leadership threatens to leave the eurozone, then the rest of Europe must have
developed a mechanism to cushion that,” he said.
In a separate interview with Britain's Observer newspaper,
Zoellick warned of the risk of a “Lehman's moment” if the crisis is not properly
handled - a reference to the bankruptcy of US bank Lehman Brothers in September
2008 that triggered a global financial slump.
Zoellick steps down as World Bank president on July 1 and
will be succeeded by Korean-born US health expert Jim Yong Kim, who was
nominated by President Barack Obama for the post.
He told the Observer that developing nations need to brace
for “uncertainty coming out of the eurozone and the wider financial markets”.
“Uncertainty in markets is now starting to increase costs
for developing countries,” Zoellick was quoted as saying. “The ripple effects
are making everybody’s life harder.”
The eurozone will be on the agenda at a G20 summit from Monday in Mexico, overshadowed by mounting fears about Spain and Italy.
