Europe is in even worse economic shape than we are, with first Greece and now Italy being so indebted that they are threatening to pull down the whole Euro-zone house of cards. And even Germany, still an economic powerhouse, may not have enough money or the will to bail everyone out. Fareed Zakaria calls on the only country with the financial wherewithal to bail out Europe: China
The time has come for China to adopt a broader concept of its interests and become a “responsible stakeholder” in the global system. The European crisis will quickly morph into a global one, possibly a second global recession. And a second recession would be worse because governments no longer have any monetary or fiscal tools. China would lose greatly in such a scenario because its consumers in Europe and America would stop spending.
Of course, China would have to get something in return for its generosity. This could be the spur to giving China a much larger say at the IMF. In fact, it might be necessary to make clear that Christine Lagarde would be the last non-Chinese head of the organization.
In a world awash in debt, power shifts to creditors. After World War I, European nations were battered by debts, and Germany was battered by reparation payments. The only country that could provide credit was the United States. For America, providing desperately needed cash to Europe was its entry into the councils of power, a process that ultimately brought a powerful new player inside the global tent. Today’s crisis is China’s opportunity to become a “responsible stakeholder.”
The former Soviet Union promised to bury us. But that was in a time when nations dominated each other by war or the threat of war. Now nations can substitute economic for military power and just buy up the countries they want. If things get worse, don’t you think lots of Americans would be willing to give up their liberty and their sovereignty for some personal affluence?
Of course, you don’t have to sell out to China to make that kind of bargain. Maybe the much-hailed “China model” of an authoritarian government that controls the economy while exploiting the free market will be the ideology that gets us out of our current economic malaise. That platform would probably get a lot of votes.