Don’t depend on BRICS bailout, WB chief warns Europe
19 Sep 2011
World Bank president Robert Zoellick has warned Europe that it can't depend on BRICS countries for a bailout of the euro zone's troubled economies, and said European leaders needed to make fundamental decisions about the direction of the currency union.
"There's no silver bullet. There's no panacea," Zoellick told The Wall Street Journal in an interview on Friday as European finance ministers were meeting in Poland. "Nobody is going to come in with a big bag of money to buy out the problem."
European officials have looked to Brazil, China and the other big emerging markets, including South Africa - which together own trillions of dollars in reserves - as places to sell large amounts of sovereign debt.
Brazil announced almost unilaterally last week that the BRICS nations - Brazil, Russia, India, China and South Africa - would discuss euro-zone problems at their meeting in Washington this next week.
China has hinted it could provide financing in exchange for trade concessions; but the others – particularly India – cannot afford such luxuries. Russia and the others too have been lukewarm to the proposal.
India has made official noises in support of the Brazilian proposal; but its entire $3 billion foreign exchange kitty would be a drop in the ocean in euro zone terms. Moreover it is perpetually struggling to balance its own economy.
