The deadline is approaching. We are closing in on the commencement of the summits in Toronto – or more precisely Muskoka and Toronto. The two summits will certainly provide some clues as to how well these two leaders clubs are operating. Is collective effort meeting the global governance challenges presented by the agendas presented to leaders? In particular, can we see a growing collective leadership in the new G20 Leaders Summit?
In particular with respect to the G20 there is a growing concern that as the acute phase of the global financial crisis passes that this new expanded leaders club will be unable to hold the attention of leaders. Though achieving collaboration in the face of a global financial meltdown, this economic crisis committee is faltering as it transitions to a more permanent steering committee.
The signs are evident. In the long discussion over a bank tax, Canada the co-host of the G20 Summit has worked persistently to avoid the G20 adopting a bank tax. It appeared that G20 Finance Ministers meeting in Busan Korea several weeks ago had agreed to adopt common principles but not to adopt a universal means to ensure banks would not have to look to taxpayers to support banks in another financial crisis. But this approach appears not to be. The UK Government this week announced their emergency budget and included a bank levy. Chancellor of the Exchequer George Osborne also indicated that other European governments notably the French and the Germans would be imposing bank levies as well.
This announcement by the British government before even the appearance of effort to identify common G20 principles seems to undermine the coordination sought by G20 leaders. If the governments appear unable to coordinate over even this one policy, what are the chances for coordination with all of the G20, including India, Brazil and China over the bigger global imbalances and in fashioning a framework for strong, sustainable and balanced growth.