This weekends meeting at Camp David of the G-8 national leaders ended on a flat note yesterday. Barack Obama entertained his guests but no real solutions for improving the economy resulted during the discussions. Of course, Obama claims that an ′emerging consensus′ has begun to take shape. But the reality is that France′s new president, Francois Hollande, and German Chancellor Angela Merkel are still miles apart on the subject of what is best for the European Union and its economy. Obama is more largely concerned with how the Euro-Zone will effect the United States economy and his own reelection bid this November. The news, however, is quite grim.
Greece is essentially at a point of no return. The latest from there is that the Greek Parliament either wants the country to be completely bailed out by the rest of the EU, namely the German banks, or they will simply default. There seems little left for any solution that keeps Greece in the EU for the long run.
Add to that the drama of Spain and its banks the past two weeks. The Spanish government has already taken over some banks, including nationalizing the fourth largest one about two weeks ago. Credit agencies like Moodys have also been busy downgrading a long list of banks in Spain. About 19 Spanish banks were reduced to junk bond status just this past week.
France is looking like it is in more trouble than the previous administration let on. A German economic minister is now predicting that it may take another two years at least for the EU to crawl its way out of the current debt crisis. But all of that will go down the drain quickly if France abandons austerity measures and raises taxes on their productive citizens to 75%. Why bother working?
The G-8 meeting at Camp David this weekend wound up another failure for Barack Obama, once again proving his amateur status as a national leader. He may have enjoyed meeting a fellow Socialist, Francois Hollande, but no real plan for success was achieved. Angela Merkel holds all the cards but her grip in Germany may be slipping as the economic pressures of Greece, Spain and other European Union members squeeze the German banks, and people, too much. If the Euro-Zone continues on its present course, it will soon dissolve, dragging the United States down with it. New leadership is required here to prevent that from occurring.