Asked Mar 15, 2009, 03:15 AM
The finance ministers of the "rich countries" are meeting is an Eglish resort to hash out the ground work for their April 2 meeting ....where they will try to solve the financial problems of the world in a single day . Indications are from initial impression that it could be a fiasco.
Representing the growing economic powerhouses,Brazilian Finance Minister Guido Mantega said the IMF (International Monetary Fund) would not get extra money from China, India, Russia or Brazil until their voting power at the IMF increases .... A reasonable demand. There is a call for nations with money reserves to boost the IMF reserves to $500 billion. Japan has already pledged $100 billion ; but they are looking for China to contribute more. But that could come with strings attached like more looking the other way at China's currency manipulations.
Britain's call for a "Global New Deal" (in Gordon Brown's words) is being met with resisitance by France ,Germany and others(it is not clear if the US is buying into it either ).For Gordon Brown ,his political life may depend on a successful summit. Much of the rest of the EU leadership is completely uninterested in any coordiated recovery at all, beyond protectionist regulation.
Canada mocked the US over the bucket list because of the nationalist language in the law
. Guido Mantega was critical of the US regarding the status of the zombie banks. He wants us to either nationalize them or let them go under. The Brits Sir Gus O'Donnell, Britain's most senior civil servant ,is publicly saying that the failure of Obama and Geithner to fill the staffing at Treasury is making the prep for the summit ?unbelievably difficult?.Every key position within the Treasury, with the exception of Geithner, remains vacant or awaits confirmation.
Lawrence Summers is arguing the the Europeans are not doing enough to bolster demand. Such calls were ?not to our liking,?
replied Jean-Claude Juncker, Luxembourg?s prime minister.
All in all ;the G20 meeting is beginning to shape up to become the equivalent of the London World Economic Conference of 1933 that collapsed in acrimony,and prolonged the Great Depression. The two week conference then yielded little but heated and nasty rhetoric. London Economic Conference - Wikipedia, the free encyclopedia
November 15 G20 nations pledged to refrain from protectionism.Since then 17 of the G-20 nations have imposed major trade restrictions, (tariffs, subsidies , licensing requirements). Anti-dumping complaints have soared.
The National Interest
?Buy American? Provisions in the you.S. Stimulus package have been matched by similar measures elsewhere, with the EU ambassador to Washington declaring that ?Nobody will take this lying down.? Brussels has resumed export subsidies to EU dairy farmers and restricted imports from the United States and China. Meanwhile, India is threatening new tariffs on steel imports and cars; Russia has enacted some thirty new tariffs and export subsidies. In a sign of the global mood, WTO antidumping cases are up 40 percent since last year. Even less blatant forms of economic nationalism, such as banks restricting lending to ?safer? Domestic companies, risk shutting down global capital flows and exacerbating the current crisis.
If the only thing that will come from the summit is more of the same finger pointing and protectionist begger-thy-neighbor polices it would be better if the summit were not held at all.