Former Canadian prime minister Paul Martin has added his voice to the chorus of those blaming Europe for the world's financial woes and calling on leaders to take decisive and immediate action to fix the problem.
Europe's financial problems are largely related to fears that over-leveraged banks are vulnerable to a Greek debt default, which could in turn create a ripple affect that would freeze credit globally.
Martin, who served as finance minister under former prime minister Jean Chretien before succeeding him as PM, acknowledged there is no easy solution to the problems in Europe, but said immediate action is required and the EU has dropped the ball.
He told Â鶹´«Ã½ Channel the G20's Financial Stability Board should be given greater power to step in and take action when member nations fail to do so.
"I feel so strongly that the Financial Stability Board has to be given the authority and the enforcement mechanism not just to deal with a small number of countries but to deal with the global banking system," Martin said.
"What we've seen in Europe is a classic example. There has to be an overall body that will co-ordinate national regulation."
Martin acknowledged that the number of nations involved, and the lack of a single governing financial regulator mean economic decision-making in the European Union is extremely difficult.
"Fundamentally, they created a common currency but they didn't put in place the institutions that would enable that common currency to be governed and they're paying the cost for that now," Martin said.
Martin said the current debate between France and Germany over whether the EU should put together a bank bailout that deals with the entire continent at once, or one that looks at struggling nations on a case-by-case basis, is a perfect illustration of the problem in Europe.
Essentially, he suggested, the economic problems are worsening while leaders argue over who has the best solution to the problem.
Finance Minister Jim Flaherty, Bank of Canada Governor Mark Carney and International Monetary Fund Managing Director Christine Lagarde have all called on European leaders to stop dithering and take action to fix their struggling economy.
While Martin acknowledged that financial troubles in the U.S. are causing major shockwaves around the world, he said they pale in comparison to those in Europe.
"I think we all understand if the Americans were able to get their act together politically they do have a means of dealing with their deficit and their debt. The European situation is much more difficult," Martin said.
