London presents mixture of hope, intense anxiety

By You Nuo (China Daily)
Updated: 2009-03-31 08:39

LONDON: The forthcoming G20 London summit is expected to hear clarion calls for unity from across the globe, but the general mood in the host country's Fourth Estate is more of hope and intense anxiety.

The moot question that is on everyone's minds is whether British Prime Minister Gordon Brown would be successful in brokering a deal after spending weeks traveling around the world.

Special coverage: G20 Financial Summit Related readings:  Vice premier calls on G20 to fight crisis unitedly  Thousands join G20 protest  IMF 'needs reform' to raise more funds  China may offer IMF $100b during G20 summit: expert

Another factor that is being closely watched is whether the leaders from the European continent, the Germans and French in particular, are willing to contribute more to the worldwide stimulus efforts.

There is also intense speculation on how and how much emerging economies would be willing to contribute.

Many others feel that the summit could prove to be a confidence-booster and a solution-maker, rather than a hot air generator, or even worse, a replay of the catastrophic London Monetary and Economic Conference in 1933.

In an interview with US President Barack Obama, the Financial Times ran an editorial saying that the G20 participants will either put in place a program for recovery and reform or be "held responsible for the collapse of the promise of a better world".

The paper cited a list of criteria for a successful G20 summit, including more stimulus (monitorable by the IMF), more capital for the IMF, cleaning up the financial mess without accelerating disintegration of the global financial system, and no more protectionism (monitorable by both the WTO and IMF).

But most likely, differences will persist on the quantum of stimulus that needs to be provided by different countries, even though US President Obama has pledged a G20 accord on the same. The paper reported that a draft G20 communique it had obtained on March 29 did not contain specific plans for the fiscal stimulus package, "which has been resisted by European countries".

The article criticized Germany for failing to figure out the logic for enlarging the stimulus while "China may be beginning to understand it".

However, the Daily Telegraph reported yesterday, both the US and Britain might have backed away from Prime Minister Gordon Brown's initial $2 trillion (or 2 percent of the global GDP) "New Deal" to revive the global economy.

The Telegraph also reported "White House officials" confessing that there is no chance of a deal that entails further public debt.

On the previous day, Telegraph commentator Ambrose Evans-Pritchard noted that only a united front can save the world when industrial production is collapsing faster than during the early 1930s, in the Great Depression.

The commentator stressed that people should not be misled by the apparent normality, because it takes time for people to feel the full impact of unemployment and social devastation. In 1931, he recalled, the press reported "green shoots" everywhere. It was Part Two of the Depression that was the killer. And "Part Two is what we risk now if we botch it", he warned.

While some commentators refer to the historical lessons of the Great Depression, others are also paying attention to the activities that are to take place away from the main summit, such as Obama's talks with the leader of Russia after the "re-set" of the bilateral relations; and his talks with leaders from China and India, following the US proposal for something of an "environmental G20".

Any breakthrough on curbing carbon emissions "would be just as far-reaching as anything agreed by world leaders on regulating hedge funds" in London, according to an editorial in the Independent newspaper yesterday.

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