As Greece prepares for another round of elections Sunday that may result in the country’s exit from the Euro Zone, leaders of the top 20 economies prepare to navigate the aftermath Monday and Tuesday in Mexico.
Speaking on the matter late yesterday afternoon, Timothy Geithner clarified that the U.S., which has received external pressure to act, will not provide a bailout to Europe. Geithner claims the country has enough money to manage their own crisis. Arguably, a bailout would be a risky maneuver going into an election season. Regardless, should fiscal fallout occur and European banks suffer a bank run, it could slow the U.S. economy even further.
The G20 gathering will focus on jobs, economic growth, in addition to how to proceed following Greece’s election. According to The Hill, “Geithner said he expects European leaders to ‘state their intentions’ on three elements of reform: a banking union, a financial firewall and growth measures for lagging economies at the G-20.”
Needless to say, a lot will ride on the G-20 talks next week. Following the G-20 meetings, European leaders will gather to workout the conditions of Greece’s latest bailout. They will have to decide whether or not to provide the funding, if and how deeper integration should occur, and how to establish a firewall so the crisis does not occur again.