Can the G-20 Save the World?

This does not bode well for the London summit, which British Prime Minister Brown would like to turn into a major show of handshakes and kisses on the cheek. To preserve the peace, the hosts are trying to gloss over the conflicts with a show full of harmony, the roles clearly defined: Obama as the new center of world politics; Merkel as the valiant soldier fighting the powerful on Wall Street; and Brown as the successful summit diplomat.

Coming to an End

But others are also seeking to stake out their territory. Chinese Prime Minister Wen Jiabao has already suggested, ahead of the conference, that the era of the dollar as the world's key currency could be coming to an end.

And Brazil's socialist president, Lula da Silva, chimed in with a comment that was as racist as it was timely: "It was a crisis caused and encouraged by the irrational behavior of white people with blue eyes, who before the crisis appeared to know everything, but are now showing that they know nothing."

In the end, the summit, though unlikely to put an end to the current crisis, could very well make it easier to diagnose future crises before they begin. There will be a few compromises on wording, as is to be expected at an international summit meeting. The draft of the final communiqué, which the British sent to the capitals of the participating countries last week, offers a foretaste of the sort of crisis prose to be expected in London this week:

"We are determined to restore growth now, resist protectionism and reform our markets and our institutions for the future. We believe that an open world economy, based on market principles, effective regulation and strong global institutions, will ensure a sustainable globalisation with rising prosperity for all."

As lofty as these words are, they merely mask rather than solve the conflicts at hand. Nevertheless, the Downing Street authors of the communiqué did address the core issues in the remainder of the document.

Supported by Obama's new administration in Washington, they intend to stimulate worldwide growth, using all available tools and sparing no expense. For instance, the communiqué continues, the participating countries will be asked to stimulate the ailing economy with $2 trillion (€1.52 trillion). That figure, however, is still in brackets, a clear sign that it has yet to be settled on and could end up being bigger.

This sort of stimulus would "increase output by 2 percentage points and employment by 19 million," Brown's experts write. They even want to incorporate a concrete growth target for the world economy by the end of 2010 into the communiqué, as if optimism could be delineated. A specific number will be inserted during the final negotiations.

An Accelerating Crisis

The efforts of the Anglo-Saxons are likely to be met with unease in the German government. Chancellor Merkel and Finance Minister Peer Steinbrück fear that new, debt-financed economy stimulus programs could shatter government budgets, destroy the value of currencies and lay the seeds for the next crisis.

If open tensions erupt in London, the summit could end up being a failure. And yet, given the magnitude of the global crisis, nothing could be more important than cooperation and unity.

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