Christine Lagarde Seems To Be Making Progress In Raising $500 Billion businessinsider.com
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Europe once again dominated discussions on the final full day of the forum in Davos. Despite some optimism about Europe's latest attempts to stem the crisis, fears remain that turmoil could return.Whether the markets remain stable could rest for now on if Greece, the epicenter of the crisis, manages to conclude crucial debt-reduction discussions with its private creditors. It's also seeking to placate demands from its European partners and the IMF for deeper reforms.
A failure on either front could force the country, which is now in its fifth year of recession, to default on its debt and leave the euro, potentially triggering another wave of mayhem in financial markets that could hit the global economy hard.
One German official even said Saturday that Greece should temporarily cede sovereignty over tax and spending decisions to a powerful eurozone budget commissioner to secure further bailouts. The official spoke on condition of anonymity because talks on the idea are confidential.
"The fact that we're still, at the start of 2012, talking about Greece again is a sign that this problem has not been dealt with," Britain's Osborne said.
For Donald Tsang, the chief executive of Hong Kong, efforts to deal with the 2-year-old debt crisis have fallen short of what is required. The failure to properly deal with the Greek situation quickly has meant the ultimate cost to Europe has been higher, he said.
"I have never been as scared as now about the world," he said.