Economy: US And China Pressure Europe On Debt Crisis

The United States and China piled pressure on Europe on Saturday to get to grips with its debt crisis before it risks causing bank runs and pushing the global economy into ruinous recession.

The U.S. Treasury chief, in his most explicit warning to date about the crisis, said it was time for the European Central Bank to step up and take a central role to get it under control.

World financial markets have been wracked by fears the Greek debt crisis could overwhelm other euro zone countries and their banks, but took some comfort on Friday from signs of new resolve by European officials to bolster defenses after nearly two years of what many see as half-hearted action that has policy-makers talking openly of possible Greek default.

"The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally," U.S. Treasury Secretary Timothy Geithner said in a speech at the International Monetary Fund.

"Decisions as to how to conclusively address the region's problems cannot wait until the crisis gets more severe."

Geithner's warning was echoed by China's central bank governor Zhou Xiaochuan, but with an added twist that countries running big deficits, like the United States, also must act responsibly.

"The sovereign debt crisis must be resolved promptly to stabilize market confidence, and forceful and credible fiscal consolidation measures are needed in relevant economies to alleviate sovereign debt stress," Zhou told the IMF.

His Holiness Mirza Tahir Ahmad describes the method for Economic Peace in his book, Islam’s Response to Contemporary Issues, stating:

The Islamic economic order neither belongs to capitalism nor to scientific socialism. The economic philosophy of Islam is scientific without being mechanical. It is disciplined without being over restrictive. It allows private possession and private enterprise but does not promote greed and the amassing of wealth in a few hands whereby a large section of society turns into destitute, serfs and slaves to a cruel and relentless system of exploitation.

Click to read the full chapter Economic Philosophies of Capitalism, Communism and Islam


The Ahmadiyya Post, Economy. Sept 24, 2011