CHARLES DALLARA

I had the privilege of living in Greece in the early 1970s.

The emphasis so far on fiscal austerity, while to a degree necessary for the countries facing market funding difficulties, is excessive when carried out across the board.

Observers and even some officials raise questions about the future of Greece as part of the Eurozone, while the Eurozone itself struggles to deal with fundamental flaws at the heart of its architecture.

How can the United States preserve its financial and security leadership role when it conducts itself with such ineptitude and such disregard for the consequences for the world?

The Fed cannot levitate markets forever. And when they finally do move, I think we have to be prepared for a considerable amount of turbulence.

The Greek people deserve an economy that is not burdened forever by a heavy bureaucracy and a bloated public sector.

Countries that are occasionally immature in their ability to manage their economic affairs as well as they should - and that includes most of them - are going to find that the world is at risk.

I think it is incumbent on the rest of us - and I would suggest that includes other European leaders - to pause in what has become a very popular game of telling the Greeks how to run their lives.

Greece's debt is going to be a function of a lot of factors down the road.

In a moment of stress, funding may go to systemically-important firms, which could pull funding away from firms not making the cut.

I think that it would be a mistake for any institution to think that their stake in a default or in a voluntary accord is determined by the amount of their exposure, hedged or unhedged.

Our long-term prosperity depends critically on the ability of world leaders to make politically difficult decisions at a time when the global economy is still vulnerable on so many fronts.

Unfortunately, I think we could see that fairly early in 2015: The cloud of economic weakness in Russia is spreading over Europe. It has the potential of spreading into contagion into other emerging markets, particularly those with large energy companies, such as Petrobras in Brazil.

We can no longer contemplate a world in which public or private sector funds are used to bail out or recapitalize failing firms.

When you inject capital into the parent, it may or may not benefit the subsidiary.

The Germans argue - and I can fully understand them - that the euro countries must surrender their sovereignty, because that is the only way to implement budget discipline in a fiscal union.

You look at the U.S. budget deficit, and you cannot help but feel that this is a serious accident waiting to happen. And not just a serious U.S. accident, but a serious global accident.

A new forum is needed that reflects the realities of today's globalised world and the rising importance of emerging markets.

It is certainly possible that the Greek economy can revive and achieve some growth over the years ahead.

A core group of the world's leading economies need to come together and hammer out an understanding.

If you step back and think about it, just a little over two years ago, in 2009, it was not surprising at all to see Chinese exports growing at a 30-plus percent clip.

I think Putin will have to find a way to signal, even if it's a modest signal, an openness to dialogue.

Threats of trade protectionism, plus unilateral actions on the exchange-rate front, such as the heavy interventions of China, Japan, and Switzerland in the currency markets - not to mention the retaliatory tariffs recently passed by the U.S. House of Representatives - endanger growth prospects and could further depress financial market confidence.

It is time to recognise that austerity alone condemns not just Greece but the whole of Europe to the probability of a painful and protracted era of little or no economic growth. This would be a tragedy not just for Greece and for Europe, but for the world.

2005 is highly likely to be a more challenging environment, both for policymakers and investors.