Davos focus likely to fall on Europe’s debt crisis

Published Jan 23, 2012

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Matthias Armborst Davos, Switzerland

The sovereign debt crisis in the euro zone is set to cast its shadow over the Alpine slopes of Davos this year, where world leaders are meeting from Wednesday to discuss the future of the global economy.

“One can get the impression that we are faced with a global burnout syndrome,” said Klaus Schwab, the founder and president of the World Economic Forum, whose annual summit is held at the Swiss resort.

Amid mounting uncertainties, the world needed new ideas for reforms, and new models for political and economic leadership, he said.

“Capitalism, in its current form, no longer fits the world around us,” the economist concluded as he recently presented plans for this year’s event, set to attract a record 2 600 participants.

“We have failed to learn the lessons from the financial crisis of 2009. We have a moral divide, we are overindebted, we have neglected investments in our future, we have undermined social cohesion. And we run the risk of completely losing the trust of future generations,” he warned.

The World Economic Forum’s 2012 Global Risks Report lists 50 dangers that echo these ideas. The authors said the most serious and credible risks included long-term imbalances of national budgets, income disparities, food and water crises, climate change, cybercrime and corruption.

Many of these problems could lead into a dark future, “undoing the progress that globalisation has brought”, they found. “Therefore we have to fight the risks while facing sins of the past,” Schwab said, arguing that old governing models would lead the world even deeper into crisis.

Heads of state from nearly 40 countries are expected to travel to Davos to discuss these issues. German Chancellor Angela Merkel is to give the opening speech.

The participant list includes UK Prime Minister David Cameron, UN secretary-general Ban Ki-moon and International Atomic Energy Agency chief Yukiya Amano.

As the debt crises in Europe and the US will weigh heavily on the minds of attendees, expectations run high for participants such as International Monetary Fund managing director Christine Lagarde, World Bank president Robert Zoellick and US Treasury Secretary Timothy Geithner.

Schwab said the forum he founded was not an unelected world government, as some alleged. “We are not a decision-making platform. We are a platform for looking for solutions.”

Activists of the Occupy Movement plan to let forum attendees know that they disagree with this argument, based in their igloo village that they have been setting up in Davos. However, only a few hundred protesters are expected in Davos. – Sapa-dpa

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