G20 Summit Threatens To Descend Into Meaningless Handshaking
The last G20 summit saw Brown milking his statesman role, the public getting all hot and flustered at the Obamas, and Berlusconi annoying the Queen and sandwiching himself between leaders with more gravitas so as to bask in their reflected glory. Oh, and a lot of banter about how to fix the economy.
The next summit is starting today in Pittsburgh, and with the recession technically coming to an end, expect a lot of handshaking, backslapping, and sombre guff about there still being a lot of work to do. Some of the measures laid out at the London summit have been met, like the creation of the Financial Stability Board (though the oxygen-starving level of bureaucracy it seems to be inviting may render it ultimately useless). Others, like the stimulus packages, are in theory working but in reality have only had a fraction of their total amounts released. With the recent domestic handwringing over cuts indicative of a growing resistance to further Keynesian intervention, surely one of the big aims of the Pittsburgh summit should be the stronger enforcement of stimulus plans.
But as David Smick mused on Associated Press yesterday: “They’re going to have a nice discussion, in which they come up with side issues to fixate on – bankers salaries”. Alastair Darling is duly setting this stall out already, saying “the party has got to be over” for bankers, who must start to “behave sensibly”. Tough words indeed. Of course, received wisdom states that appearing tough on pay is a fast-track to public adulation, hence these high-profile quotes. But to be fair, once remuneration gets unilaterally sorted, more progress can be made on regulating the activities of hedge funds and investment banks – creating a competitive disadvantage by lowering pay may disrupt proceedings. It’s a question of sorting the genuine concerns from the latent self-interests of business lobbyists and banking chiefs.
Meanwhile Nicolas Sarkozy is threatening to walk out of the summit if an agreement on remuneration isn’t made, though his finance minster, Christine Lagarde said (with more than a hint of weariness): “I hope that we will save [Mr Sarkozy] the trouble of having to walk out”. He’s recently shown that he’s a world leader when it comes to pay reform, ruthlessly enforcing a series of pay rules for French banks the likes of which the UK regulators pussied out of. Still, this whole “do it or I walk” routine is getting a bit wearying – he threatened to walk during the last summit, and then didn’t, so the whole thing has a touch of “the boy who cried wolf” about it.
It sounds like there’s going to be repeat of the utterly incoherent protests we saw in London too. From the Guardian: “a group called the Pittsburgh G20 Resistance Project plans a mass march today, gathering people with anti-capitalist, environmental, union-driven and economic concerns. ‘We’re an anti-authoritarian group,’ said a spokesman, Noah Williams. ‘We reject all forms of hierarchy and repression.’”. Way to engage with the issues on their own terms, guys. Pass the alfalfa.
Still, they’re not the only ones with an agenda so broad it’s destined for impotence. Obama is using the summit to press for a reduction in tax breaks for fossil fuel energy producers – it’s hard to decide whether this is creating important momentum ahead of the Copenhagen climate conference, or unnecessarily diluting the economy-heavy agenda of the G20 summit. Probably more important to the G20 is discussion of the aforementioned points, plus reminding everyone of the dangers of the creeping protectionism that was emerging at the start of the year – this looks like being the idea that Brown brings to the table most forcefully.
We’ll be back tomorrow to look at whether they did talk about any of this, or just chucked some soundbites around.
Posted by Ben Beaumont-Thomas in Hot Money | September 24, 2009 12:59PM |