Aug. 16 - The World Bank says it's too early for joint G20 action on the soverign debt crises in Europe and the U.S.; up to individual governments to bring down their long-term debt. Arnold Gay reports.
World Bank President Robert Zoellick says it's too early for joint G20 action on the sovereign debt crises in Europe and the U.S., adding it's up to individual governments to bring down their long-term debt. (SOUNDBITE) (English) WORLD BANK PRESIDENT, ROBERT ZOELLICK, SAYING: "You still have sovereign governments having to make decisions in Europe. They do it within a super federal structure, and it really is going to be the responsibility of each of those sovereign entities to make the calls about how they're going to face not only the short-term challenges, often assisted by their central banks, but also go to the medium and long term, and that varies by each market." Euro zone policymakers have been battling to contain a debt crisis that threatens to enter a dangerous new phase by engulfing larger nations on the region's periphery. The European Central Bank has been forced to step in to buy Italian and Spanish bonds, while Germany and France are scheduled to meet later Tuesday (Aug 16) to discuss further measures to ease the crisis. Speaking in Canberra, Zoellick says it's time to push a free trade agenda, warning against rising protectionism as a way for countries to fix their debt crisis. Zoellick notes the appreciation of China's yuan currency would be a positive step towards restoring global economic stability, while also helping tackle China's inflation. (SOUNDBITE) (English) WORLD BANK PRESIDENT, ROBERT ZOELLICK, SAYING: "The circumstances have changed a little bit. And so as China started to worry about its inflation rate, I think that led to some balancing of the consensus in China to move towards appreciation of the currency. That can help deal with some of the inflation rate. It's also a contributor, I think, to some of the stability in the international system." Zoellick's comments coincide with recent state media and Chinese commentators calling for a more flexible yuan. In a front page editorial Tuesday (Aug 16), the state-owned China Securities Journal says conditions are ready for a wider trading band, between the yuan and the dollar. Arnold Gay, Reuters