For weeks, the headlines have been dominated by banks faltering and countries propping them up. But we have entered a new phase of this crisis in which countries themselves are starting to struggle. Where these battered countries are first turning for help illustrates that what we are witnessing is different from anything we have seen before. It also lays out a clear challenge for those who are hoping the global financial summit announced over the weekend will produce an effective Bretton Woods II, a new international system reflecting a new financial order.

For decades, countries in trouble have turned to the International Monetary Fund and the great powers of the developed world for the cash infusions needed for debt payments or to meet budget shortfalls. Typically, the money came with conditions, conforming to a prescription known as the Washington consensus that promoted market liberalisation and fiscal responsibility. For many the conditions were odious. But money talks and the result was the classic illustration of soft power, of western states advancing their interests not at the point of a gun but at the tip of a cheque-signer’s pen.