Euro woes dominate annual Davos conference in Swiss Alps


BRUSSELS, Belgium – The Swiss alpine resort of Davos used to be renowned as the setting for Thomas Mann’s classic novel The Magic Mountain, where a bunch of sick people agonize about life while catastrophe looms in the form of World War I.

Since 1971, Davos has become better known as the site of the annual World Economic Forum of global movers and shakers. This week it will be filled with powerful people agonizing about their sick economies while catastrophe looms in the form of a new world recession.

Big names attending this week include German Chancellor Angela Merkel, International Monetary Fund Managing Director Christine Lagarde, US Treasury Secretary Timothy Geithner, South African President Jacob Zuma and European Central Bank Governor Mario Draghi.

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Mick Jagger said he was curtailing his visit however. The Rolling Stones’ front man pulled out of planned appearance with Prime Minister David Cameron at a tea party to promote Britain, claiming he was being used as a “political football.”

In all, the five-day meeting that opened on Wednesday will bring together over 1,000 top business executives, 85 government ministers and 40 heads of state or government, along with gaggles of journalists, economists, faith leaders and the like. Bloomberg writer Matthew G. Miller calculated there were at least 70 billionaires attending.

Naturally, Europe’s economic woes are set to dominate. Merkel opened proceedings with a warning that the continent had to make painful economic reforms or face a future in the economic doldrums.

“Unless we do it, we will certainly still be an interesting place to take a vacation, but we will not be able to provide prosperity for our people,” she told the conference.

Merkel insisted Europe would defend the embattled euro currency, but poured cold water on calls for a doubling of the bloc’s 500 billion rescue fund.

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Over the years, Davos has seen historic meetings between Israelis and Palestinians, black and white South Africans and Greeks and Turks which have been hailed as promoting peace. Aid groups, environmental campaigners and trade unionists all see the forum as a useful place to get their messages across to the business and political leaders. Government officials say the informal networking atmosphere facilitates deals and exchanges of ideas.

However, it’s not just the anti-globalization protesters camping outside the Davos security ring who wonder about the relevance of the elite, invitation-only get together in today’s age of austerity.

“Over the years, and in the context of an increasingly unsettled and uncertain world, Davos has not had much impact,” blogged Mohamed A. El-Erian, CEO of the global investment management fund PIMCO.

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