Desperate in Davos: policymakers struggle for answers

Sat Jan 23, 2016 1:19pm EST
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By Noah Barkin

DAVOS, Switzerland (Reuters) - Angela Merkel was missing from Davos this year, but the German leader's optimistic mantra "we can do this" echoed through the snowy resort in the Swiss Alps.

China's economic slowdown? Manageable. Plunging financial markets? Temporary. And Europe's refugee crisis? A big challenge, but one which will ultimately push the bloc's members closer together, audiences were told over and over again.

Beneath the veneer of can-do optimism at the World Economic Forum, however, was a creeping concern that the politicians, diplomats and central bankers who flock each year to this gathering of the global elite are at the mercy of geopolitical and economic forces beyond their control.

At the top of the lengthy list of worries was Europe, whose policymakers remain deeply divided in their approach to the refugee crisis at a time when the bloc faces a host of other threats, from Islamic extremism and the rise of far-right populists, to a possible British exit from the European Union.

"You've had deadly crises in Europe from day one and we've overcome them. However we always had one crisis at a time. Today we have about five, from Brexit to ISIS and everything in between," said Josef Joffe, the publisher-editor of German weekly Die Zeit.

"In the past we had leadership. Today we are facing overwhelming demands on leadership and we are delivering less of it," he added.

Amid the reassuring messages on the refugee crisis, came stark warnings from people like IMF chief Christine Lagarde that Europe faced a "make or break" moment. Dutch Prime Minister Mark Rutte and his Swedish counterpart Stefan Lofven gave the bloc 6-8 weeks to get its act together.

And frustration boiled over after Austria became the latest country in Europe's Schengen passport-free travel zone to unveil unilateral steps at the border to stem the tide.   Continued...

People leave the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich