World Bank chief blasts irresponsible leading economies

WASHINGTON: World Bank President Robert Zoellick Wednesday blasted leading economies, especially Europe, for irresponsible policies that are dragging down the rest of the world.

The United States, Europe, Japan and China are all guilty of poor policies that have hurt the global economy, especially the poorly-founded eurozone, Zoellick said.

He faulted the 17-nation common currency area for unifying monetary policy while allowing members to go their own ways on spending and taxation, leading to the current crisis.

"The global economy has entered a new danger zone with little running room as European countries resist difficult truths about the common responsibilities of a common currency," he said at George Washington University in Washington.

"It is not responsible for the eurozone to pledge fealty to a monetary union without facing up to either a fiscal union that would make monetary union workable or accepting the consequences for uncompetitive, debt-burdened members."

Zoellick spoke shortly ahead of a key tele-summit scheduled between Germany, France and Greece -- the eurozone's two strongest economies and its weakest, respectively -- aimed at stanching the fracture of regional unity.

Zoellick also pointed his finger at China, the US and Japan for not being "responsible stakeholders" in the world economy.

"It is not responsible for the United States to falter in facing fundamental issues such as unsustainable growth in entitlement spending, the need for a pro-growth tax system, and a stalled trade policy," he said.

Japan, meanwhile, "has resisted structural economic and social reforms that could retool its sputtering economic model."

And China, the world's second largest economy but still young as a global power, needs to be "a responsible trading partner" with a "responsible exchange rate system" as well as "responsible investments" and "responsible environmental policies."

Copyright AFP (Agence France-Presse), 2011