As leaders of the world’s largest advanced and emerging economies gather in the Mexican resort of Los Cabos, the mood is decidedly grim. Although the latest Greek election result has offered a temporary respite, G20 leaders know that, with Spanish and Italian borrowing costs pushing higher, the European crisis has entered a dangerous new phase.
“This meeting is coming at an absolutely critical time and we’re waiting for Europe to tell us what it is going to do,” said outgoing World Bank chief Robert Zoellick in a panel discussion at Los Cabos. “The danger we’re creating is that the pattern of policy making is increasing uncertainty and making markets more nervous.”
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