The balance of financial power in the global economy is shifting dramatically and decisively as the Old World G7 nations no longer have the clout or cash to provide lasting solutions, and the cash-rich New World G20 nations take on the job of global governance. But these countries have their own set of problems. And while the talk rarely stops, the action has barely begun.
The crucial moment in this year's euro crisis came during the frenzied weekend of the European summit when U.S. President Barack Obama put a call through to France's President Nicolas Sarkozy and German Chancellor Angela Merkel. The message was twofold: They had to get ahead of the crisis—and the United States would help. The €110 billion package they were planning was not nearly enough, said Obama; it should be at least five times that amount. The United States would back an unprecedented €250 billion credit facility from the International Monetary Fund (IMF) and the U.S. Federal Reserve Board would offer an open-ended commitment to dollar-euro currency swaps.
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