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We've grown used to international summits down the years. They bring their unique choreography: the over-friendly greetings, posed pictures and, at the close, a statement, most of which was actually agreed beforehand and in reality does not amount to very much. And the world moves on. Tomorrow, at the luxurious South Lodge Hotel in deepest rural Sussex, the finance ministers and central bankers of the G20 club of the EU and 19 of the world's richest nations assemble, ahead of their bosses' showpiece pow-wow in London next month. We desperately need it to produce more than the usual group photos.
Everyone is agreed that this G20 gathering - and this weekend's preparatory meeting - seriously matter. The world is in danger of financial meltdown. Its banking system is poleaxed. Solutions to the present crisis have to be found and measures put in place to prevent a recurrence.
The events of recent months have vividly illustrated the importance of a collective approach. This is an international storm that has left no country untouched. A crook called Bernard Madoff commits fraud in New York and his victims seemingly reside in every major city and stockbroker belt. Defaulting homeowners in the American Mid-West have brought down bankers in London and caused their banks to rein in their lending, hitting businesses, jobs and mortgages.
This financial equivalent of a butterfly beating its wings and unleashing a hurricane on the other side of the world has been graphic and terrifying. It's no use one nation operating in isolation: this demands a global response. Which is why it is so depressing and worrying that the signs are that the one time the G20 should agree it will be unable to do so.
Indeed, finding a common line on anything that will make an actual difference is virtually impossible.
There may well be an acceptance that the International Monetary Fund should receive a financial boost. But this is out of necessity due to the trouble we're in, rather from desire.
The IMF's executive board wants an additional $250 billion to prop up fragile emerging economies. The US says it can have $500 billion. But it wants other countries, notably China, to raise their contributions to help pay for the extra funding.
Even this isn't a foregone conclusion: while Britain is in favour, the Europeans, foremost among them, Germany, are not so keen. They don't take kindly to being hectored by the US - the country they hold responsible more than any other for the current maelstrom.
That resentment spills over into other areas. The US is thought to want the G20 members to use the levers in their fiscal systems to achieve growth in global GDP of two per cent this year and next - the same benchmark set by the IMF. Currently, they are achieving 1.4 per cent, with the bulk derived from three nations, the US, China and Japan (as to Britain's contribution, it is negligible, such is the weakened state of our economy).
Other countries, of course, should do more. But telling them is not the same as getting them to act - and if you're not careful, if you tell them too harshly, the chances of them responding in kind are reduced.
The US is leaning heavily on the IMF, playing up its role, emphasising its importance. All that is serving to do so far is annoy those countries that suspect Obama sees the international organisation as a convenient crutch - he's using the IMF to mask the lack of certainty by an administration that is still in its infancy and feeling its way.
Obama came into power in the midst of deepening trauma. The talk in Washington is of a new leader struggling to cope under the sheer burden of expectation thrust upon him. It's not his fault - but while he has moved hesitantly, the recession has accelerated. American banks are still stuffed with toxic assets. As with their British counterparts, they are stubbornly refusing to lend. To the despair of the world markets, the Obama regime appears no nearer finding a solution that will stop the rot and kick-start recovery.
The net effect of this is that far from concentrating on the one package of measures that will have a positive impact - providing economic stimulus - the G20 is likely to fall back upon the bits that look good on paper and provide arresting headlines and soundbites but don't get to the cause of the slump. So expect some initiative against hedge funds, something agreed on excessive bank bonuses and an onslaught against tax havens.
It's the G20 equivalent of Gordon Brown's assault on the bankers - an arresting sideshow and not without merit but a sideshow nonetheless. While he berates the bank chiefs for their greed, the real catalyst for financial ruin - his and former US Federal Reserve chairman Alan Greenspan's encouragement of an explosion of credit (coupled in the UK with an inability to curb government spending) - is ignored.
When a regulatory system that could not cope was thrown into the mix, the fateful recipe was complete. Getting the G20 to overhaul their jealously guarded supervisory bodies and policy frameworks is likely to prove an uphill task.
Agreeing to new raised standards of corporate governance and a push for greater transparency is probably the best that can hoped for. Meanwhile, those pariahs of the international community - hedge funds and tax havens - will receive a roasting (the former because they are regarded as a convenient embodiment of evil and the latter because the governments would like to rake in more cash). That in itself is not without irony in a London which has built much of its latest success on the back of hedge funds setting up here and its popularity as a relaxed tax centre.
There is a danger that instead of tackling the real issues, the summit will focus around the edges in this way. But if that happens in Sussex and in London next month, and we just get the usual hot air, the consequences will be grave. This time, the world needs something better than a photo-opportunity.
Reader views (2)
Strange then that your paper idolises Dave with his Webcamoron and tendency to agree with everybody he meets in an attempt to be the People's Politician. Dave is great at PR and making content-free speeches which your journalists lap up. But we are assured when he gets elected everything will suddenly change.
- Humph, Acton England, 14/03/2009 13:08
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Sure...! And hey...!! - the UK desperately needs to stamp out its MPs' pay and expenses fraudsters, too...! - tut-suite...!!!
- Joanna Jay, Walton on Thames, 13/03/2009 14:35
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