ANN ARBOR, Mich. — The anti-Wall Street protests that began in New York and have spread across the country and beyond its shores reflect "anxiety," the World Bank chief said Wednesday, though his bigger concern is how financial and economic problems in the United States and Europe affect the developing world.
Speaking to an audience at the University of Michigan, Robert Zoellick described a "fragile situation" as European countries try to work out a broad solution to the continent's deepening debt crisis, and he said the U.S. debt, deficit and lowered credit rating are "big concerns." Still, he said, there is far less margin for error in developing nations, which increasingly are becoming "a motor and engine for the world's growth."
"What I'm most worried about are problems in the developed world that will drag down the developing world and developed world," said Zoellick, president of the Washington-based institution that makes loans and grants to developing countries worldwide. He is a former executive at Goldman Sachs and Fannie Mae and served as a deputy secretary of state under President George W. Bush.
Even as Zoellick questioned the coherence of the Occupy Wall Street movement's message, he said its protests as well as those in Greece aren't being ignored by Asia, Africa and elsewhere.
"There's a disquiet, an anxiety," he said.
He said there remains in the world a feeling "that the U.S. is a special place," but financial and political problems are causing people in developing nations to ask, "Will the U.S. get its act together?"
"It's not only important for the U.S. — it's important for the rest of the world," Zoellick said.
Meanwhile, European countries are working toward a solution ahead of a weekend summit in Brussels. It became clear earlier this year that the initial bailout for Greece was not working as well as had been hoped, and European leaders agreed on a second, $151 billion bailout. But key details of that rescue fund, including the participation of the private sector, remain to be worked out.Comment on this story
Zoellick, invited to speak by the university's Ford School of Public Policy, said European leaders need to recapitalize their banking system, though he's concerned about how rapidly they can achieve that.
"If the Europeans can set some definite steps ... markets will react well to that," he said. "It takes some of the bankruptcy risk off the table."
Likewise, he said, U.S. political leaders need to act now on reigning in the biggest federal expenditures and should start with Social Security, specifically by tying its rate to cost of living rather than wages and raising the retirement age to reflect longer lifespans.
"The good news is you could actually deal with this problem in a real way if you start now. If you wait, it's like Europe," he said.