World Bank’s Robert Zoellick talks on a theme dear to this blogger’s heart – namely, that the political leaders on both sides of the Atlantic just are not performing and collectively are one of the main causes for the loss of confidence and market turmoil and economic malaise.
“What’s happened in the past couple of weeks is there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries,” he said.
So let’s see what happens at the summit between French president Nicolas Sarkozy and German chancellor Angela Merkel and whether they are able to lead and forge a way out of the Eurozone crisis. There is only one realistic alternative now: closer fiscal integration and a serious Eurobond system to bail out the weaker members. If that doesn’t happen, then the markets are going to starting testing with the targets again being Italy and Spain.