The Bric quartet – Brazil, China, India and Russia – own the equivalent of about €3,000bn in foreign exchange reserves. Combine this immense sum with the resources of European governments and the European Central Bank, and there emerges the seductive vision of a swift and painless end to the eurozone’s sovereign debt and banking crisis. This vision is a mirage.
The Bric countries undoubtedly fear that Europe’s troubles may soon spread across the oceans and destabilise their economies and financial systems. Such apprehensions may spur the quartet, especially China, to extend some support to the eurozone – at a price, of course. Nevertheless the fundamental responsibility for overcoming the crisis must and will rest with the Europeans themselves.
The Bric label disguises the fact that the four countries, with which South Africa is sometimes associated, do not really speak with one voice on the world economic stage, let alone co-ordinate their actions in advance. Indian officials were surprised when Brazil proposed on Tuesday that Bric finance ministers and central bank governors should use a meeting in Washington next week to discuss joint action in support of the eurozone. Yet the potential political benefits of such an initiative are obvious. It is a pertinent reminder that the Bric nations are aware not only of the importance of financial market stability, but of the redistribution of global economic power from the west to the east and south.