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02 March 2024

World Bank chief: Germany could draw ire in 2012 over crisis


The World Bank head said Friday that Europeans could turn against Germany this year over the debt crisis and called on Berlin to offer more support for struggling eurozone states Italy and Spain.

Speaking at the Munich Security Conference here, Robert Zoellick said:

"2012 could be a year where Germany becomes a leader of Europe or ... in which Germany stumbles and draws the ire of Europe.

"If Germany at the end of 2012 is only associated with austerity and the key countries can't maintain the political support for the economic actions, then Germany could become the target of ire," he added.

He said that other countries, including emerging markets, failed to understand why Germany was reluctant to plough more money in to provide a solution to the crisis.

Emerging markets are looking at Germany with "some confusion, then some frustration, then some disdain," he said.

He said a high-level Chinese official had recently told him: "Why should I act if Germany is not worried enough to act?

"Leadership would involve charting a course to try and offer support and incentives - particularly (for) Italy and Spain, which are the fundamentally critical countries here - if they apply fiscal discipline and structural reform," said Zoellick.

"I'm not saying throw money away. I'm saying make clear in advance the support that they will receive if they act," added the World Bank chief.

Chancellor Angela Merkel has come under fire to put more money into Europe's bailout pots but has remained steadfast, saying the current mechanisms are sufficient.