G20

THE LONDON SUMMIT HAS NOT FIXED THE CRISIS

For the first time since the crisis erupted two years ago, global leaders went a few millimetres beyond what was expected of them. The decision by the Group of 20 developed and emerging nations to commit $1,100bn (€816bn, £741bn) in new funds for international institutions is no doubt substantial. It will allow the International Monetary Fund to deal with the current and future torrent of balance of payment crises more effectively. But the London summit comprehensively failed to do what it set out to do. Not one of its resolutions will move the world a small step closer to resolving the global economic crisis.

As world leaders return home, they will be confronted by the reality of the decisions they have not taken. They will return to economies in which bankruptcies and unemployment are about to rise to the highest levels since the Great Depression. They will face an outraged public that seeks to exact revenge on bankers and banks.

The longer they wait, the harder it will be to take the needed decisions. Many of those decisions, such as the recapitalisation of the global banking system, will become a lot more expensive, and politically difficult, if we procrastinate while the economy deteriorates further.

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