We Need More from Our Leaders Than Group Photos and Soundbites; the G20 Finance Ministers Meet in Sussex Tomorrow. They Should Be Planning Real Action to Tackle the Global Crisis Not Fine Words for Next Month's London Summit
Byline: CHRIS BLACKHURST CITY EDITOR
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. …