Europe didn't fall apart this week - by Fen Osler Hampson

To all appearances, the G20 Summit of world leaders, which wound up its meeting in Cannes, France, Friday appears to have been an unmitigated disaster. The political crisis in Greece hijacked an agenda that was supposed to come up with long-term plan to rebalance the global economy, promote financial stability, and address pressing new issues such as global food security. Instead, it was a summit of venting, anger, finger pointing, recriminations, and disappointment.

The message coming out of the summit is also clear: Europe will have to put out its own economic fires and come up with its own solutions before non-eurozone members of the G20 offer any kind of serious help.

There has also been a whiff of schadenfreude in the G20's response to the eurozone crisis. During the 2008-'09 U.S. banking crisis, Sarkozy wagged his fingers at American profligacy while calling for a global summit in the wake of the collapse of Lehman Brothers. Now Americans (and Canadians) are wagging fingers at him and his fellow Europeans.

One piece of good news is that Papandreou's brinksmanship with the Greek voters and the EU forced Greece's opposition parties to reverse themselves on the bailout package. They now support it. The other promising piece of news coming out of the summit is the example that Merkel and Sarkozy made of Greece. Their tough, uncompromising, take-no-prisoners approach has had a deeply sobering effect on Italy, Europe's biggest problem child. At the summit, Berlusconi agreed to accept observers from the International Monetary Fund (IMF) who will monitor Italy's deficit reduction commitments and efforts to put its own fiscal house in order.

The way forward is not going to be pretty. There will undoubtedly be more crises and brinksmanship. But Europe and the world did not fall apart this week. And it is likely that will be same headline next week and week after next as European governments finally get serious and start doing what they have to do. When we look back one day, Cannes may seem like a turning point and not a tombstone.
 
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