G20 Nations Agree to Disagree on Spending

The G20, which has more or less become the executive committee for the world economy, is wrapping up a summit in Toronto, in which the usual bunch of fake anarchists, greenies, and other stooges made for the best TV. Their attacks on the local constabulary achieved nothing, but then again, neither did the summiteers. Developed economies, especially European ones, want to cut spending to control debts (which is plain stupid given the lousy growth there), while the US and the emerging economies fear that will stifle their own growth (which is part of the problem with globalization). In the end, everyone has agreed to pursue their own political-economic policy.

The blather from the attendees was predictably banal. President No-Drama Obama waffled, "Our challenges are as diverse as our nations. But together we represent some 85 per cent of the global economy, and we have forged a coordinated response to the worst global economic crisis of our time." Among the forgers is George Obsorne of the UK's Exchequer, "I think the communiqué very explicitly recognizes that countries in the G20 with serious fiscal challenges - and after all I am here representing the country with the largest deficit - need to accelerate the pace of consolidation. That language is reflected in the coalition agreement on which the British Government is formed. It has been delivered in the Budget we have presented earlier this week."

Whenever there is no real agreement among global leaders, the communiqué takes a long time to draft to ensure nothing of consequence is said. The Telegraph reported, "In a sign of how much work was involved to forge this G20 consensus, negotiators spent at least 45 hours drafting the summit's final communiqué, said Dominique Strauss-Kahn, head of the International Monetary Fund."

In addition, the G20 agreed that the big economies need to cut their deficits in half by 2013; every major G20 country had already committed to this before the summit. Again, the Telegraph notes

The delay marks a victory for banks and countries such as Japan, Germany and France, which said that the shift to stricter rules by 2012 would have imposed huge capital-raising burdens on banks and jeopardise lending and economic recovery. However, the chief executive of Deutsche Bank warned that too much variance in the timelines could lead to an uneven playing field for banks. Proposals for a global levy on banks have been dropped, Mr Harper [Canada's PM] said. Instead, that will be left to individual countries.