Poor old Greece has unfairly become the whipping boy of the G20. But you can’t help feeling that if the likes of Greece and the Greek people – whose desire to have a say in how their economy gets out of the hole that it’s in has caused all the kerfuffle – had more of a say, the G20 might do a better job.
The G20 thinking on the Greek debt problem goes something like this: Greece has gotten into a mess because of the irresponsible behaviour of the financial sector, the Greek government (and people) need to pay the price to get out of this mess in order to keep the financial sector onside.
The G20 slavish obsession with reactions of “the market” in the absence of real efforts to manage the market better is bewildering.
CAFOD agrees with the recent Vatican statement (perhaps unsurprisingly) that there must be a better way for governments to manage global markets, rather than be managed by them.
One aspect of this would be an independent and predictable framework for arbitrating on sovereign debt claims alongside standards for responsible lending and borrowing.
The lack of such a system has left developing countries, and more recently Eurozone ones, forced to negotiate from a position of weakness “austerity measures” (that’s cuts to us) and held the G20 summit hostage to negotiations and brinkmanship – rather than finding the fixes for what got us into this mess in the first place.
If you asked the people in developing countries and in Greece, if they wanted a more sensible way out of debt problems than watching nervously for market reactions (in the name of stability and growth), forcing cuts to keep them happy and jeopardizing stability and growth as a result, the G20 priorities might look somewhat different.
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