CIGI EXPERTS RATE THE OUTCOME
While offering just a few specific actions to bolster confidence and help stabilize the global economy, the G20 summit in Cannes ended today with an anti-climactic communiqué that fell far short of initial expectations, capping a week in which the world’s “premier economic forum” was deeply distracted by the Greek debt crisis.
On a positive note, the appointment of Mark Carney, governor of the Bank of Canada, to the position of chairman of the Financial Stability Board capped a push for concrete progress on the G20’s initiative to coordinate financial regulation.
The summit was also marked by an ostensibly voluntary decision by debt-ridden Italy to invite the International Monetary Fund (IMF) to carry out a public verification of its fiscal reforms on a quarterly basis. This marks a major leap in surveillance inside a key European economy. In addition, new IMF resources and tools were promised to deal with the possibility of future crises.
But on a wide range of other issues, the G20 substituted vague optimism, generalities and platitudinous commitments to the possibility of future action – including on the issues of market-determined exchange rates, climate finance, commodity price volatility, development, completion of multilateral trade negotiations, an international framework on corruption, and much more.
- The “Framework for Strong, Sustainable and Balanced Growth” agreed to in Pittsburgh and its companion Mutual Assessment Process, were nowhere mentioned in the Cannes communiqué. True, surplus countries agreed to take on more of the burden of stimulating the world economy, relative to deficit countries, but that is a directional commitment that had already been implied in earlier G20 statements.
- In fact, there were very few, if any, new measures addressing growth, investment, and employment issues, or the social dimension of globalization, in spite of the global economic slowdown and persistently high employment and the declared priorities of the French presidency.
- On infrastructure investment in developing countries – mixed results. The G20 identified 11 exemplary projects, but set a high governance bar for quick disbursement of investment that may not be realistic in many countries.
- Where was U.S. leadership? The president walked a wide circle past the Eurozone crisis and in a post-summit news conference focused on U.S. domestic issues and Congressional politics.
- In the absence of a major new economic crisis arising in the next six months, the G20 Summit to be held in Mexico in June may be prove a better opportunity than Cannes to address the core issues of economic stability, growth, trade and financial regulation.
INTERVIEW REQUESTS: CIGI experts at the Cannes summit are available for one-on-one interviews. Contacts (click to email):