GMF - The German Marshall Fund of the United States - Strengthening Transatlantic Cooperation

Yet another European sovereign debt crisis plan is expected to be unveiled soon by European leaders. Squabbling over its specifics and recent experience suggest the effort will be a day late and a euro short, doing little to slow Europe’s slow motion economic train wreck.

Too much is at stake for the world to continue to treat the euro’s problems as purely a European responsibility. It is time for other nations that have too much to lose from Europe’s meltdown to come to the euro’s rescue in return for Europeans’ commitment to boost their bailout war chest, to further tighten their budgetary belts and to put in place stronger policies to avoid a recurrence of the crisis.

This is a role for the G20, whose collective pump priming kept the post-financial crisis global recession from turning into another Great Depression. Now the G20 is needed to bail out Europe.

The European Financial Stability Facility is woefully inadequate for this task. In response to pressure from financial markets, euro-area governments are discussing expanding both the scale and the role of the fund. But the compromises needed to reach a European consensus almost ensure that any such effort will fall short of what is necessary if Spain’s woes worsen or if Italy or Belgium get in trouble.