Here comes another assessment on the performance of Eurozone economy. Mr. Kahn, the former chief of IMF believes that the current debt crisis that Eurozone is facing has its roots in the growth crisis, which in turn has its roots in the poor leadership in the Eurozone. Kahn opines that the leadership has consistently disappointed in handling the messy affairs of Eurozone economy.
Some may attribute his skepticism and criticism of European leadership as a ploy to get back in the political race and realizing presidential ambitions that got recently thwarted on his involvement in a scandal. However, a close look will only ratify his allegation.
For any solution to work, first, the leaders will need to acknowledge the problem. However, divided views of the leaders of core economies of Eurozone - France and Germany - can hardly leave anyone with a sense of optimism.
It is also relevant to question here the significance of recently held European summit in Brussels to which Mr. Kahn is indifferent. The highlight of the summit was European Stability Mechanism (ESM) programme; a bail out funding programme worth Euro 500 bn. While ESM fund may help to plug one hole, it will do so at the expense of entire European population.
The launch of the fund has been forwarded by almost a year and there are still months for it to be operational. In the meanwhile, such funds aimed to salvage the Euro economy may get affected by the rating agencies downgrading member nations facing impending crisis, thus jeopardizing the rescue plans. Besides, it could be a matter of weeks before the problems of one member nation of Eurozone become an uncontainable contagion thus engulfing the entire global economy. Last but not the least, even if the crisis can be contained by that time, things are too messy and bail outs will be too costly to expect anything beyond a short term respite.