The global economy has entered a "danger zone" that will require emerging and advanced economies led by China, the U.S. and Europe to address challenges aggressively, World Bank President Robert Zoellick said Wednesday.
Zoellick, in prepared remarks for a speech in Washington, said too many advanced economies have resisted making the fiscal and structural changes necessary to ensure global growth. While he said he's skeptical that advanced economies will lose their role in the world economy, Zoellick said the reticence to address issues such as the sovereign debt concerns in Europe could affect the broader global economy.
"Unless Europe, Japan and the United States can also face up to responsibilities they will drag down not only themselves but the global economy," he said.
With considerable attention being paid to the health of Europe's banking system and weaker economies, Zoellick said the onus is on the region's leaders to make changes. It is irresponsible for euro-zone countries to have a common currency, he said, "without facing up to either a fiscal union that would make monetary union workable or accepting the consequences for uncompetitive, debt-burdened members."
The responsibility to bolster global growth lies not just with the advanced economies, however. Zoellick singled out China specifically, suggesting Chinese leaders know the country's export-driven growth model is unsustainable.
"We need China to be a responsible trading partner; to move toward a responsible exchange rate system; to offer intellectual property responsible protection," Zoellick said.
Zoellick, in prepared remarks for a speech in Washington, said too many advanced economies have resisted making the fiscal and structural changes necessary to ensure global growth. While he said he's skeptical that advanced economies will lose their role in the world economy, Zoellick said the reticence to address issues such as the sovereign debt concerns in Europe could affect the broader global economy.
"Unless Europe, Japan and the United States can also face up to responsibilities they will drag down not only themselves but the global economy," he said.
With considerable attention being paid to the health of Europe's banking system and weaker economies, Zoellick said the onus is on the region's leaders to make changes. It is irresponsible for euro-zone countries to have a common currency, he said, "without facing up to either a fiscal union that would make monetary union workable or accepting the consequences for uncompetitive, debt-burdened members."
The responsibility to bolster global growth lies not just with the advanced economies, however. Zoellick singled out China specifically, suggesting Chinese leaders know the country's export-driven growth model is unsustainable.
"We need China to be a responsible trading partner; to move toward a responsible exchange rate system; to offer intellectual property responsible protection," Zoellick said.
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