What the world is witnessing in the Los Cabos G20 Summit is one more step in a sequence of global and regional summits which define the process by which governments of major countries work through the complexity of global challenges and their relations with domestic politics.
This morning in Los Cabos, Jose Manuel Barroso, the President of the European Commission and Herman Van Rompuy, President of the European Union, gave a joint press conference. In it, EC President Barroso said, that content is more important than pace in the economic reform process in Europe.
As my colleague, Fred Kuntz, points out, for journalists attending the Los Cabos summit, the idyllic setting makes it difficult to concentrate on the enormity of the challenges confronting G20 leaders. Nevertheless, the importance of those challenges was evident early on Monday. Despite the Greek election results, which provided an all-too-brief "relief rally" in financial markets, Spanish bond yields hit new euro-era highs, leading to renewed concerns for the European banking system.
James A. Haley, Director, Global Economy Program, CIGI, reviews the key risks that G20 leaders face and considers what is needed to address short-term economic risks to avoid the loss of an open, dynamic trade system.
This is the weirdest part, Act Two in the usual four-act play of global summitry.
Everything that comes before the G20 Leaders Summit amounts to Act One. At the front of the stage, you’ll see the media, academia and think tanks publicly analyzing the problems and the politics, recommending policy solutions. Backstage during this opening scene, the G20 teams of bureaucrats behind each national leader – the so-called “sherpas” – are busy negotiating possible wins that might become public at the summit.
Colin Bradford discusses policy pressures and tensions at the G20 Los Cabos Summit 2012. While pressure rises for Europe to deal with its debt crisis, pressure is also increasing for the other G20 countries to have confidence in Europe ahead of the Declaration set to be released tomorrow.
The euro zone debt crisis is leading to apparently conflicting calls for economic growth and fiscal austerity. Solutions may vary by country, but in the short term G20 nations may need to incur more debt to spur growth. The G20 can also take important steps to improve economic competitiveness, harmonize financial regulations through the Financial Sustainability Board (FSB) and it can do more to promote Green Growth by promoting sustainable energy initiatives.
Amid concerns about the global economy and euro zone debts, G20 leaders must take collective action to address issues of financial stability – and avoid retreating into protectionist measures in trade and capital flows, CIGI economist James A. Haley says.
Colin Bradford, CIGI Senior Fellow, discusses three key relationships and their relevance for G20 leaders in creating the right balance to achieve growth: growth and austerity; growth and financial stability; and short- and long-run growth.
James A. Haley, Director, Global Economy Program, CIGI, offers an overview governance challenges at G20 Los Cabos Summit 2012: the unstable situation in the Euro zone and uncertain growth prospects in the US and China are anticipated as leading issues.
Angel Gurria, the Secretary General of the OECD, was first off the mark with pre-G20 summit briefings in Los Cabos. He gave a press conference last night against a backdrop of heightened concerns about rising unemployment and, he warned, rising inequality—particularly in countries struggling with the euro crisis and in the grips of fiscal austerity. The vote in Greece today gives his concerns a concrete focal point.