G8 fails to find consensus

The great hope this weekend was that the G8 would exceed expectations, and do something (anything) to calm markets. It did not happen. The major players appear as divided as ever.

The decleration issued by the Whitehouse contains the following flaccid statement on Europe:

We affirm our interest in Greece remaining in the euro zone, while respecting its commitments

The journal claims that Hollande and Merkel disagreed over the issue.

In the pages of the Journal, the major players appear as caricatures of themselves. Hollande wants to show strong commitment to Greece, Merkel worries about moral hazard, and Cameron panics about the consequences.

… others who attended the sessions indicated that divisions remained about how specifically to deal with Greece and the currency union’s broader debt woes.

Some in the group, including Mr. Hollande, wanted to send a strong signal to Greece that its future lay in remaining within the euro zone.

But other leaders accepted German Chancellor Angela Merkel’s position that argued that if support for Greece was unequivocal, it risked sending the message that Greece could have a free ride without having to meet conditions attached to its bailout aid.

British Prime Minister David Cameron said, “There is a growing sense of urgency that action needs to be taken, contingency plans need to be put in place and the strengthening of banks, governments, firewalls… need to take place very fast.”

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2 Responses to G8 fails to find consensus

  1. drpage says:

    I was about to post on this. What an underwhelming outcome! They did not even try to dress up some kind of BS statement dressing up old money as new.

    Time for markets to hit the PANIC button methinks.

    • Ricardo says:

      Yeah, smacks of exhaustion doesn’t it. Obama must be annoyed at them – if they cause a crisis, and the unemployment rate goes up again, it will boost Romney back into the Pres race.

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