David Cameron, the UK prime minister, has called on eurozone leaders to adopt a “big bazooka” approach to their woes. Barack Obama, US president, spoke to Nicolas Sarkozy, president of France, after the latter’s weekend meeting with Angela Merkel, Germany’s chancellor, to press for action. Herman Van Rompuy, the European Council president, has promised that leaders of the European Union would meet on October 23 to “finalise our comprehensive strategy”. That would allow the Europeans to present a plan for restoring confidence to the summit of the Group of 20 leading economies in November.
So should we feel confident that the crisis will soon be over? No.
At least, nobody now sees the eurozone crisis as a little local difficulty. It has become the epicentre of an aftershock of the global financial crisis that could prove even more destructive than the initial earthquake. Potentially, it is a triple shock: a financial crisis; a crisis of sovereigns, including Italy, the world’s third largest sovereign debtor; and a crisis of the European project with unknowable political consequences. It is no wonder people are frightened. They ought to be.