A bad trip to the French coast
Nicolas Sarkozy, France’s president, who was hoping that the chance to host the world’s most powerful leaders would give a much-needed boost to his hopes of being re-elected next year. The summit failed to make any significant progress on the priorities he outlined at the beginning of the year, notably volatility in international commodity markets and a consensus on a global financial transactions tax.
Angela Merkel, Germany’s chancellor, who – along with Sarkozy – publically stated six weeks ago that the G20 meeting would be a line in the sand and that the worst of the eurozone crisis would be behind us. She continued to oppose any attempts to enhance the powers of the European Central Bank to allow its financial might to be used to help struggling economies.
David Cameron, the British prime minister, who failed to convince the rest of the world, particularly the US, to enlarge the capacity of the International Monetary Fund (IMF) to help the eurozone. He fell out with Merkel and did nothing to thaw his frosty relationship with Sarkozy.
Silvio Berlusconi, Italy’s prime minister, whose inability to deal with his country’s economic crisis became ever more apparent. On each of the two days of the summit, Italy’s cost of borrowing, the best indicator of investors’ confidence in a country’s economy, reached euro-era record highs.
Yet Berlusconi still denied there were problems. “Italy does not feel the crisis,” he said at the conclusion of the summit, dismissing the turmoil on the financial markets as “a passing fashion”.
He added: “The restaurants are full, the planes are fully booked and the hotel resorts are fully booked as well.” Yet he was forced to agree to the IMF coming to monitor the implementation of his reform measures, admitted that he had been offered – and had turned down – an IMF loan, and witnessed Giulio Tremonti, his finance minister, sitting alongside him at a press conference, refuse to comment on whether Italy needed a new government.
Barack Obama, the US president, who despite acknowledging that he had received a “crash course” in European Union politics, failed to persuade the EU’s leaders to agree a way out of the crisis.
George Papandreou, Greece’s prime minister, who despite not even being in the G20 found himself centre-stage after being summoned to Cannes on Wednesday night. Merkel, Sarkozy and other eurozone leaders put him under immense pressure to call off the referendum on his country’s bail-out and associated austerity measures that he had called just 48 hours earlier. He carried out the U-turn the next day and, later in the week, survived a vote of confidence, failed to assemble a unity government and eventually resigned.
Herman Van Rompuy, José Manuel Barroso and Jean-Claude Juncker, the heads of the European Council, European Commission, and the Eurogroup of eurozone finance ministers respectively, failed to make any sort of impact. They held separate meetings in addition to the main G20 to try to break the eurozone deadlock with, among others, Papandreou and Obama, but made little headway. Barroso described the summit as “successful”, but it is hard to see why.
NGOs and other pressure groups. From those lobbying for a fairer distribution of wealth or a global financial transaction tax, to those, like Bill Gates, the chairman of Microsoft, who addressed world leaders on the summit’s first day and urged them to spend more on international development, the G20 was a wasted opportunity. The dominance of the eurozone’s debt crisis meant leaders had little time to focus on anything else.
It is difficult to see how anybody attending the G20 could be deemed a winner. However, as the group also comprises leaders of industrial and emerging-market countries, it must be the emerging economies that now hold the trump cards.
They refused to invest in the eurozone’s rescue fund, the European Financial Stability Facility (EFSF), waiting to see what they could extract in return, and they are now being courted by the world’s old powers as never before.
As if to emphasise this, Christine Lagarde, the managing director of the IMF, followed the G20 summit with a trip to Moscow on Sunday (6 November) for talks with Dmitry Medvedev, Russia’s president, to urge him to help boost the EFSF’s resources.
Lagarde’s first G20 summit in her new role was not a complete disaster. The IMF’s credibility was enhanced by its surveillance role in Italy, but she has work to do to pin down G20 finance ministers on figures when they discuss IMF expansion in February.
If anyone within the eurozone is to claim any sort of success, it must be José Luis Rodríguez Zapatero, Spain’s prime minister. Spain is not a member of the G20 club but gets invited to leaders’ summits anyway. Zapatero went relatively unnoticed, having managed to steer Spain away from the problems associated with Greece and Italy. During the current chaos, that counts as something to be satisfied about.
But perhaps the biggest winners from last week’s gathering are Cannes’ hoteliers, were able to charge record rates of their own for rooms.
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