The ripple of fiscal problems
World Bank President Robert Zoellick, M.P.P. ’81, J.D. ’81, spoke at the John F. Kennedy Jr. Forum Tuesday on a range of issues, from the role of his organization to emerging markets to the preservation of wildlife. Zoellick spoke candidly and thoughtfully about many of the challenges facing the world, including the current European financial crisis. The spillover effects of the eurozone crisis on the stability of the developing world are a big concern, he told the audience at the forum, which is affiliated with the Harvard Kennedy School (HKS). Economic problems in Europe and the United States last August created a shock wave throughout the system. Equity markets in general dropped 20 percent, bond spreads (the interest rate differential between two bonds) started to increase, and currencies took a steep dive. “What I’m most worried about, and remain worried about, is if the problem in consumer and business confidence in Europe...