WATERLOO – When it comes to world leaders who’ve tackled debt and deficit woes, these two know of what they speak. So when Paul Martin and Ernesto Zedillo opened on a pessimistic note as they discussed the European debt crisis, it brought the severity of the situation into sharp relief for the capacity crowd at the new CIGI auditorium.

The Governance Blueprints from Global Leaders public panel with the former Canadian prime minister and former Mexican president kicked off CIGI ’11, CIGI’s annual fall conference, titled "An Unfinished House: Filling the Gaps in Global Governance." Chrystia Freeland, editor of Thomson Reuters Digital, moderated the event and kept the former leaders on their toes as she peppered them with questions, both her own and a few from the live webcast audience.

Despite the bleak opening, Martin and Zedillo managed to identify a few “windows of opportunity” on the horizon that could help the European Union and the developing world — and with them the rest of the global economy — avoid another recession or worse. But both cautioned that the consequences will be dire, disastrous even, if collective action isn’t taken soon to right the global economy and restore a sense of general equilibrium.

The panellists’ familiarity with and respect for one another was evident throughout the night as they agreed to disagree, often in jest, on issues on which they clearly had a past. For Martin, euro zone economies such as Ireland, Italy and Spain need to reclaim some of their sovereignty if the European Monetary Union (EMU) is to survive and function properly. Zedillo countered that EMU nations cannot have it both ways and reap the benefits of European integration without surrendering at least part of their sovereignty.

The G20 was the topic on which Martin and Zedillo, who now heads the Yale Center for the Study of Globalization, were perhaps farthest apart. The former, who helped bring about the G20 at both the finance ministers’ and leaders’ level, argued that there is no credible alternative to tackle global economic impasses as the G20 can. Martin pointed to the London summit of 2009, which staved off a 1930s-style global depression, as evidence of the G20’s effectiveness. Zedillo, however, seemed ready to read the G20 its last rites, largely for its failure to implement commitments made at every summit, London included. Martin responded by saying that “now is the time to lay the foundation” for a rules-based multilateral system that will reflect the world’s changing economic and political landscapes.

Questions from the audience ranged from climate change – to which both former leaders agreed a global carbon tax system should be established – to the merits of the "Occupy" movement. On the latter, Martin was particularly scathing of a New York banker’s suggestion that the "Occupy" movement was “a welfare problem,” adding that said banker should “look in the mirror.”

When Freeland concluded her questions to the panellists by asking them what measure(s) they would implement if they were world dictator for a day, Zedillo waxed philosophical, saying he hoped Immanuel Kant’s vision of perpetual world peace would one day be a reality. “I believe Kant was right in dreaming about that world,” Zedillo said to warm applause from the audience. For his part, Martin said he would work to change the definition of sovereignty to focus less on the rights afforded to the nations of the world and more on the responsibilities required of them.

The panellists’ familiarity with and respect for one another was evident throughout the night as they agreed to disagree, often in jest, on issues on which they clearly had a past.
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