Jacques Mistral is head of Economic Studies at the Institute Française de Relations Internationales (IFRI) in Paris.

Political Context in France

There are three elements worth noting regarding the present political context in France. First, the European sovereign debt problem has been the major issue of the first half of 2010. It has attracted a lot of attention, energy and frustration. The usually positive inclination toward international cooperation has been damaged by the chaotic process of designing the rescue mechanisms. Expectations regarding Toronto are, consequently, lower than one year ago. Second, a series of ministerial blunders (regarding personal benefits garnered from official positions) have raised suspicion and probably tarnished political initiatives; President Sarkozy was questioned about these issues in Toronto. Third, the “ignominious” defeat of the French soccer team in South Africa was the subject of every news story and discussion. The president has even called for a major initiative to rejuvenate French soccer. Attention to the G8 and G20 summits in Canada and their results were, consequently, significantly lower than last year.

The Role of the G8 in the G20 Era

France has always been proud to be part of the G8 (from its beginnings as the G6 and then the G7). Last year, however, it welcomed the creation of the G20 as the “premier forum for international cooperation.” The G8 meeting this year in Huntsville was, consequently, largely overshadowed by the G20. The disappearance of aid to Africa as a specific common goal, despite the fact that industrialized countries have only implemented half of the commitment made in the Gleneagles Agreement, was frequently cited as a failure of international cooperation. Nonetheless, a few commentators have adopted a different vision: facing the disappointment of big, divided and largely unproductive G20 meetings, “Westerners could rediscover the virtues of the G8.” The president was quoted as saying that the G8 “really is a family with common democratic values.” As the 2011 chair of both the G8 and G20, it is believed that President Sarkozy will separate the two meetings, with the G8 held in the spring and the G20 in the autumn.

G20 Conflict or Cooperation

Neither — there was no major conflict, rather there were soft compromises, but there was no cooperation either, with each nation following its own route. News about divergent views between the United States and Germany regarding stimulus measures versus fiscal austerity have been regularly popularized in France, as they were a part of the intra-European discussion about tax measures. The extremely balanced wording of the communiqué was greeted as a perfect diplomatic success — with a positive note, possibly due to our own intermediate position: France is not under financial stress. The government, however, does needs to be prudent, but we do not want to push the economy into a double-dip recession. The lack of cooperation on international financial regulation is disappointing, although it is understood that major decisions and outcomes are expected at the fall Seoul G20 Summit. On the other hand, the anticipated US adoption of legislation on financial regulation reveals that Europe is not doing enough on this issue, one in which the old continent was initially more aggressive. The absence of any reference to Doha was also frequently considered as a step in the wrong direction (or at least as bad news).

The G20 Framework 

The G20 “Framework for Strong, Sustainable and Balanced Growth” was a greatly debated issue last year. It is, therefore, surprising to see that there were so few comments devoted to this issue following the Toronto summit. In the media, there was absolutely no reference to the MAP, the Framework or any institutional topic. In contrast, many specifically national or bilateral issues were given attention, including the fact that Canada was proud of its banking sector; that Ms. Merkel had successfully proposed a conceptual innovation (“growth-friendly fiscal consolidation”); that the United States was the only OECD country without any serious consideration to fiscal consolidation; and that the special relationship between the United Kingdom and the United States was now less special. The two major — but unelaborated — elements related to institutional issues were that Chinese President Hu Jintao, first, had made a successful case for not mentioning the exchange rate regime revision as an international issue, and second, had made a strong impression when presenting his views, in simple terms, concerning the need to reform the architecture of international governance. The French president was said to have supported his views on the need for reform.

G20 Record of Achievement

Given the above, the performance of the G20 in Toronto was low among French political priorities. Ahead of the Toronto summit, news coverage on summit preparations had reasonably maintained expectations at a low level. The results were in line with expectations — no news. Surprisingly enough, this did not fuel an exaggeratedly negative response; there was a sentiment that specific routes for budget policies are an appropriate compromise and that financial regulations are hard to negotiate. The main conclusion has been: wait for the autumn…and for the 2011 chair. Could it be that some “sources” sometimes expressed satisfaction that there is still much to be done next year?