G-20 summit to address recovery
Leaders expected to grant leeway on agreements
WASHINGTON – As the leaders of the Group of 20 nations gather today and Friday for an economic summit in Pittsburgh, they’ll be testing two themes:
How much appetite remains for coordinated economic decision-making among the world’s leading and developing nations as the global crisis shifts into recovery mode? And can President Barack Obama, the host of this third meeting of G-20 government heads in a year, persuade his country to help him deliver the financial revisions and climate change initiatives that he’s told other nations he wants?
Organizers don’t expect to announce major new spending at this G-20; nothing like the summit last April in London, where leaders committed more than $1 trillion to manage the economic crisis and help poor nations. On the contrary, they’ll talk about how to dial back spending as they cautiously congratulate one another on using central bank coordination to avert a global depression.
“Pittsburgh is not intended to be a victory lap,” said Mike Froman, Obama’s deputy national security adviser for international economic affairs. “I think for the average American, the most important thing about this summit is the way it underscores how our economy here at home is integrally linked with the global economy.”
To that end, the nations will seek agreements on many fronts, including limiting compensation for financial executives, tightening fiscal controls on banks, liberalizing trade, revamping the International Monetary Fund to give nations with smaller economies a greater say in policy, and forging commitments on clean energy and climate change policies.
Nations are likely to grant one another much leeway on how they implement any agreed-on principles. While Europe wants caps on financial-executive bonuses, Obama doesn’t support government setting individual compensation levels. China, India and the United States aren’t prepared to go as far as Europe is on restricting carbon emissions.
Europe wants the United States to spell out more clearly how and when it will end government economic-stimulus policies, concerned that they skew currency values and could trigger global inflation. China sees value in continuing stimulus policies. China and Russia have expressed interest in creating a global reserve currency other than gold or the U.S. dollar, but no credible alternative has been proposed.
The G-20 accounts for about 85 percent of the world’s economy and two-thirds of the world’s population.