Carnegie Moscow Center
French President Sarkozy’s request for Chinese money in support of the euro rescue symbolized three historic shifts in great power relations: the fragility and endangerment of the European project, the ascendance of China, and the beginning of the end of the American era.
After a year that included the Arab Awakening, the euro crisis, Japan’s nuclear catastrophe, the killing of Osama bin Laden, and the unanticipated reaction to Russia’s recent parliamentary elections, there are many unanswered questions left for 2012.
With the global economy on unstable ground and little economic space remaining for additional policy support, world leaders must focus on preventing a catastrophe in Europe.
The euro crisis has grown too big for Europeans to handle alone. The United States must act to help save the euro—or risk paying a much bigger price if it collapses.
Almost two decades after negotiations began Russia is set to join the World Trade Organization. Russia, the biggest country to enter the WTO since China joined ten years ago, is expected to be confirmed as a member during the ministerial meeting in mid-December.
When Russians vote for the State Duma on December 4, the economy will be the critical issue for voters in a country still struggling to fully recover from the financial crisis.
Although Cannes provided the United States and the broader G20 with an opportunity to rescue Europe from its current economic turmoil, the G20 did not make the tough decisions necessary to end the Eurozone crisis.
When Vladimir Putin reclaims Russia’s helm in 2012, he will have to manage an economy that has lost its momentum and is approaching stagnation. Falling oil and gas revenues will only make his job more challenging.
Poland, a non-eurozone member holding the rotating EU presidency for the first time, faces difficulty pushing ahead its agenda because of the eurozone crisis. The crisis also risks diminishing the successes the Polish presidency has achieved thus far.
An economic crisis comparable in size and virulence to the Lehman Brothers episode could erupt if Italy and Spain lose their ability to borrow. The G20 must act now to stabilize the eurozone.