Outgoing World Bank President Robert Zoellick warned that Europe was facing a “Lehmans moment” and the collapse of the euro currency could trigger a global crisis, in an interview out on Sunday.
Zoellick will warn the G-20 summit that Europe risks sparking a financial meltdown that would have desperate consequences for developing countries, he told British newspaper The Observer.
“Europe may be able to muddle through but the risk is rising,” the 58-year-old American said. “There could be a Lehmans moment if things are not properly handled.” The 2008 collapse of US financial services firm Lehman Brothers — one of Wall Street’s most prestigious firms — after its risky bets on the US housing market soured, sparked global financial panic.
Zoellick added that the Europe’s leaders are doing too little too late to solve the region’s debilitating sovereign debt crisis and must act quickly.
“European politicians always act a day late and promise one euro too little. Then, when it gets tight, they add new liquidity,” Zoellick told the weekly magazine Der Spiegel in its latest edition.