Europe “took a very big bullet and wasted it” - Zoellick
(19 June 2012 – Europe) The head of the World Bank addressed business leaders on the eve of the G20 summit in Mexico, saying Europe’s bail out of the Spanish banking system was handled badly.
Robert Zoellick and other senior international economists said Europe needed to improve its institutional response and had wasted an opportunity to contain the debt crisis.
'Look everyone knows this meeting is coming at an absolutely critical time -- and we're waiting for Europe to tell us what it is going to do,' he said at a panel in the B20 business summit, held in parallel to the G20 meet.
'Markets can manage risks that they're well aware of. The danger we're creating is that the pattern of policy-making is increasing uncertainty and making markets more nervous, which has a negative feedback,' he said.
Zoellick said Spain was an example of poor execution, making markets extremely confused between the roles played within the eurozone’s various stability mechanisms, bail-out funds and central bank.
'So they took a very big bullet and they wasted it,' Zoellick said.
Eurozone powers agreed last week to provide a bail-out loan of up to 100 billion euros (A$125 billion) to salvage Spain's stricken banks, but the deal failed to stop an intensifying storm on the debt market.
'Look everyone knows this meeting is coming at an absolutely critical time -- and we're waiting for Europe to tell us what it is going to do,' he said at a panel in the B20 business summit, held in parallel to the G20 meet.
'Markets can manage risks that they're well aware of. The danger we're creating is that the pattern of policy-making is increasing uncertainty and making markets more nervous, which has a negative feedback,' he said.
Zoellick said Spain was an example of poor execution, making markets extremely confused between the roles played within the eurozone’s various stability mechanisms, bail-out funds and central bank.
'So they took a very big bullet and they wasted it,' Zoellick said.
Eurozone powers agreed last week to provide a bail-out loan of up to 100 billion euros (A$125 billion) to salvage Spain's stricken banks, but the deal failed to stop an intensifying storm on the debt market.
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