As world leaders head to the French Riviera for the Group of Twenty summit on November 3 and 4, FRANCE 24 takes a look at the issues likely to be on the table and behind the scenes at the largest international meeting France has ever hosted.
World leaders, delegates, journalists, and protesters are converging in the south of France for the G20 summit in Cannes, to be held November 3 and 4.
But if French President Nicolas Sarkozy had been counting on using his G20 stewardship to bolster shaky poll numbers that bode poorly for his 2012 re-election bid, he might have to think again. Europe’s worsening debt crisis along with Greek Prime Minister George Papandreou’s unexpected call for a referendum on the eurozone bailout have overshadowed many longer-term goals.
Economist Bruce Stokes with the German Marshall Fund, a public policy organisation aimed at fostering ties between the US and Europe, told FRANCE 24 that summits like this one are commonly “overtaken by the global news of the moment”. In other words: “What the leaders are really worried about now is a financial meltdown triggered by Greece.”
Here’s a look at the main issues likely to be on the table, and behind the scenes, over the next few days.
On the heels of the Greek prime minister’s surprise announcement, Sarkozy has put off a previously scheduled Wednesday dinner with Chinese President Hu Jintao for yet another meeting on the Greek crisis. This time, he’ll be sitting down with Papandreou, German Chancellor Angela Merkel, and IMF and EU officials. The goal, Sarkozy said, will be to “examine the conditions under which the commitments made could be maintained”, and in so doing reassure markets sent tumbling by the announcement.
According to Stokes, finding a solution to the Greek situation is of utmost importance. “A Greek meltdown would lead to a retrenchment of the financial sector across Europe,” Stokes explained. “Banks would stop lending, there would be slower growth in Europe, and that could have ripple effects all over the world.” But, Stokes predicted, “Europe will go the extra mile to keep Greece in the eurozone and in the EU…even though the chances of Greece leaving the euro[zone] have gone up dramatically in recent months”.
The euro crisis
European powers will be trying to reassure markets by sending the message that they have the debt crisis under control with a vote of confidence on the eurozone debt package expected in the next two days. EU countries will also be trying to encourage Chinese investment in a new fund to alleviate Europe’s debt burden. “Europe is China’s largest export market,” Stokes explained. “If the EU goes into recession, Chinese exports to the EU will go down and China will try to sell elsewhere. That would lead to competition and possible protectionism in other markets, and would force US banks to slow lending,” Stokes said. “And that would slow growth in the US even further.”
According to Stokes, Europeans will be trying to mobilise money not only from the Chinese, but also from India, Brazil, Russia, Japan, and the US, in order “to try to stem the crisis in Europe and provide financial resources that Europeans have not been able to pull together”.
Jobs and growth
One of the primary goals of the summit will be hatching a strategy to revive global growth, reduce unemployment, and create jobs. To do so, major powers will be expected to draft a concrete plan of action for seven countries the US, China, Japan, Germany, France, Britain, and India and a timeline to implement it. For certain countries, like the US, that will mean pledges to get their budgets and public spending under control. For others, like China, there will be pressure to tweak their economic model in order to make it less dependent on exports and to boost domestic consumption.
Meanwhile, the Financial Stability Board, an international bank regulator, is set to release a list of large banks that pose risks to the global financial system in times of economic crisis. The banks on the list will be subjected to tighter monitoring.
Nations gathered at the summit are expected to encourage the establishment of local currency markets, in order to wean developing countries off their dependence on foreign capital. There will also likely be discussion of an initiative to have the rouble, rupee, and yuan join the dollar in the “basket” of reference currencies for international trading.
Development strategies for poorer countries
A plan to develop infrastructure in poorer nations will likely be presented, with particular attention given to food security and food crisis management; a plan approved by G20 agriculture ministers to create a body intended to deal swiftly with any arising food crisis will also be on the table.
Date created : 2011-11-02