Can G20 Help?
- November 14th, 2008
- Posted by 7thmin
COMMENTARY: Convening the “G20†meeting of leading industrial states can bring together main proposals for dealing with an urgent financial crisis, but action needs to follow on any agreement.
WINDS OF CHANGE?
At the outset of the Washington gathering (13.11.08), the wind looked to be blowing towards an attempt at solutions based on regulation or other government intervention: regulatory measures like the Australian proposal to control short selling on stock markets; pressure to bring huge private operations, hedge funds and the like, back under legal purview; fiscal policies, and recapitalising banks.
Even the United States administration announced this week it had shifted towards government equity in banking enterprises, away from the earlier plan to buy out bad debts.
Yet the head of that administration, President George Bush, stepped out of line on public intervention, in a dramatic context: a public declaration on the eve of the G20.
“Our aim should not be more government, it should be smaller government,†he said.
Nostalgia for fun times and a wilder kind of capitalism, perhaps, but the mood of that speech must indicate the difficulty or impossibility of the psychological change being handled by many of the wielders of power.
Will they get a workable agreement?
They were under strong pressure from the economic and financial environment: the German economy was declared (13.11.08) to be in recession; the OECD released new forecasts of further declines in economic activity in Japan, Europe and the United States.
The wielders at Washington this week are diverse; the G20 takes in not only the main capitalist powers, even the main producers or the trading powers, but also emerging economies and larger developing states.
Different paradigms must force their way into the debate, not least the ecological imperative, need to deal with climate change, and the arguments from developing states about who should pay for that.
EUROPE AT G20
Europe has five seats at the table of twenty.
The four larger members states with large economies — France, Italy, Germany and the United Kingdom – are there as national entities, and the European Union is also there.
That means, with 19 national states and the EU making up the G20, there are actually forty-one countries represented.
Membership of the G20: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States of America, and the European Union.
EU states without their own delegation are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
Usually the G20 is made up of Finance Ministers / Treasurers and Central Bank Governors; this week’s summit of heads of government is exceptional, in keeping with the times.
Reference:
“OECD forecasts a protracted economic slowdown in US, Japan and Euro area,†OECD (Organisation for Economic Cooperation and Development), Paris, 13.11.08. http://www.oecd.org/home …, (14.11.08).
G20, Home. http://www.g20.org/G20/, (14.11.08).
Picture: G20 countries, Wikipedia