What's going on and why does it matter?
On Thursday 2 April Gordon Brown is going to host the G20 summit in London. At face value, the aims of the meeting are hugely ambitious and, with the world in recession, the organisers have suggested that this event could make a significant contribution to global economic recovery. It's also important domestically, because the Labour government is trailing badly in the opinion polls and some of Brown's aides believe that a successful summit could boost his political fortunes.
Who's coming?
Leaders from 22 countries will be at the summit – not least Barack Obama, who is attending the summit as part of his first visit to Europe (and, apart from a brief visit to Canada, his first trip abroad) as US president.
What is the G20?
It is a group of countries, like the better-known G7. The G7 group of major industrial countries was formed in 1976. It later expanded to include Russia, becoming the G8. The G20 was set up after the Asian crisis in the 1990s led world leaders to conclude that there ought to be a forum for economic debate including a wider range of countries. It had its first meeting in 1999. It does not have a permanent staff and the chairmanship rotates every year. Britain is in the chair for 2009. There are more details on the G20 website.
Who belongs to the G20?
The G20 is an organisation for finance ministers and central bankers, who in the past met once a year to discuss international cooperation in finance. There are 19 countries who are members: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. The 20th member is the European Union, which is represented by whichever country holds the EU presidency (currently, it's the Czech Republic). These countries represent 90% of global GDP, 80% of world trade and two thirds of the world's population. The IMF and the World Bank also attend G20 meetings, although technically the London event isn't a normal G20 meeting.
What's special about the London meeting?
It's not just for finance ministers, and it's not just for the G20. Leaders of all G20 countries are attending, along with their respective finance ministers and central bankers. Two other countries will be there: Thailand, as chairman of Asean (the Association of South East Asian Nations), and Ethiopia, as chairman of Nepad (the New Partnership for Africa's Development). Ban Ki-moon, the UN secretary general, and José Manuel Barroso, the president of the European commisison, are also attending. Because the guest list has been expanded, it's officially known as "the London summit".
Has a G20 summit like this ever taken place before?
Only once. Last November the G20 met for the first time at leader level, not finance minister level, at a summit in Washington. Brown and Nicolas Sarkozy, the French president, had been lobbying for the meeting as a response to the global financial meltdown. The London meeting is a follow-up.
What happened in Washington?
At the end of the summit the leaders published the "Washington declaration". It said the leaders were committed to taking "whatever further actions are necessary" to stabilise the financial system.
Against this background of deteriorating economic conditions worldwide, we agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will:• Continue our vigorous efforts and take whatever further actions are necessary to stabilise the financial system.
• Recognise the importance of monetary policy support, as deemed appropriate to domestic conditions.
• Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.
• Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and programme support. We stress the International Monetary Fund's important role in crisis response, welcome its new short-term liquidity facility, and urge the ongoing review of its instruments and facilities to ensure flexibility.
• Encourage the World Bank and other multilateral development banks (MDBs) to use their full capacity in support of their development agenda, and we welcome the recent introduction of new facilities by the World Bank in the areas of infrastructure and trade finance.
• Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.
The leaders also published a 47-point action plan explaining how they would improve the international financial system. It listed proposals under five headings: strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets, reinforcing international cooperation, and reforming international financial instutions.
Was Washington a success?
After Washington, the Centre for International Governance Innovation published this verdict:
At first sight, the achievements were significant. The very detailed final communique outlined a wide range of commitments on the regulatory front, designated some reform agendas a very high priority, and assigned regulators an urgent timetable to fulfil them ... However, we argue that the policy agenda did not in fact go much beyond pre-existing international initiatives that had recently been developed in more technocratic international bodies.
What's going to be different about London?
The London summit will build on what was agreed at Washington. But there's one important difference. Any international agreement of this kind needs US support and the Washington summit took place in the final days of George Bush's presidency. Bush's authority at the time was at an all-time low. With a new US president in the White House, the Americans may be more willing to sieze the initiative. In a recent newspaper article, Obama said he wanted the leaders of the G20 to "take bold, comprehensive and coordinated action that not only jump-starts recovery, but also launches a new era of economic engagement to prevent a crisis like this from ever happening again".
What do Gordon Brown and his fellow leaders want to achieve?
On the London summit website, the British government has explained what it hopes to achieve:
At the summit, countries need to come together to enhance global coordination in order to help restore global economic growth. World leaders must make three commitments:• First, to take whatever action is necessary to stabilise financial markets and enable families and businesses to get through the recession.
• Second, to reform and strengthen the global financial and economic system to restore confidence and trust.
• Third, to put the global economy on track for sustainable growth.
The London summit will take place against the backdrop of exceptionally challenging economic circumstances. But, just as after the second world war visionary leaders laid the groundwork for 30 years of prosperity and growth, built on international economic cooperation, this crisis is also an opportunity.
The world's leading economies can come together and lay the foundations not just for a sustainable economic recovery, but also for a genuinely new era of international economic partnership – a global deal, in which all countries have a part to play and all will see the benefits.
These aims are very ambitious. But it's worth remembering that, as host of the summit, Brown has an interest in talking up the significance of the event because that boosts his prestige domestically. In other countries expectations appear to be more modest.
Can the summit live up to expectations?
That depends on which expectations you mean. There have been suggestions that Brown would like to see the London summit as a modern version of Bretton Woods, the 1944 conference that led to the creation of the IMF and other parts of the architecture of the modern global financial system. The government hints at this comparison in its London summit website statement about what the conference may achieve (see above). As some commentators have suggested, the London summit is unlikely to achieve anything to rival Bretton Woods (which involved 730 delegates from 44 countries negotiating for 22 days). But that doesn't necessarily mean that it will be a failure. The world is facing an unprecedented financial crisis and there does seem to be considerable scope for further coordinated action.
Is there a split between the US and Europe?
Most countries in recession have agreed on the need to use fiscal stimulus measures (tax cuts or spending increases) to revive their economies. At one stage it looked as if agreement on this would be a key feature of the London summit agreement. But the EU countries are unwilling to spend as much as the US, where the fiscal stimulus is worth around 5% of GDP. The figures for European countries are much lower (although if the so-called "automatic stabilisers" – ie the increased welfare payments that kick in when European countries are in recession, but which are not paid in the US – are included, the gap between the US and the EU is much narrower). Angela Merkel, the German chancellor, said recently: "It is not time to look at more growth measures. I disagree with this idea completely. The existing measures must work."
As a result, the leaders will instead focus on areas where there is more agreement, such as global financial reform.
When does it start?
The fun starts on Wednesday 1 April. The Queen has invited leaders attending the summit to a reception at Buckingham Palace starting at around 6pm. After that, the leaders are going to Downing Street for dinner with Brown. The finance ministers and central bankers are going to another dinner, hosted by Alistair Darling, the chancellor, at Tate Modern.
What happens on the day?
The summit itself is taking place at the ExCel conference centre in east London. Leaders will start arriving at around 8am. There will be a working breakfast for leaders, and another for finance ministers and central bankers. Then there will be a plenary session lasting up to three hours. That will be followed by a working lunch for the leaders, and another for the finance ministers and central bankers. They will all get together again for an afternoon plenary. Then Brown will host a final press conference, provisionally timed for 4pm.
Can they really decide anything just in one day?
No, of course not. At meetings like this, the key deals get negotiated in advance. Much of the work for the London summit was done when G20 finance ministers met earlier this month in Horsham, in Sussex. At the end of that meeting, they issued a communique saying:
We have taken decisive, coordinated and comprehensive action to boost demand and jobs, and are prepared to take whatever action is necessary until growth is restored. We commit to fight all forms of protectionism and maintain open trade and investment.
The London summit's conclusions will to a large extent be based on what was agreed at Horsham.
How many people will be there?
Every country has been given 20 delegate passes. Around 2,500 journalists are accredited to attend. With bodyguards, translators and other officials included, there could be around 3,500 at the conference.
How much will it cost?
Downing Street has said that the summit will be "modest and businesslike" and officials have estimated that the total cost, including security, will be £19m. The G8 summit at Gleneagles in Scotland cost £80m.
Will there be demonstrations?
All high-profile government summits are now the target for protesters and the G20 will be no different. With fear and anger about the economic crisis running high large demonstrations are expected. Various rallies are planned to coincide with the summit and the run-up to it.
What demonstrations are planned?
On Saturday 28 March thousands of people are expected to attend Put People First, a union-backed march from London's Victoria embankment to Hyde Park.
On 1 April an alliance of anti-capitalist groups called G20 Meltdown is organising a carnival headed by "Four Horsefolk of the Apocalypse", which will converge in front of the Bank of England. Anarchists are planning to target the second day of the summit at ExCel. Other groups mounting demonstrations include Climate Camp, the Stop the War Coalition, and Government of the Dead. An alternative summit will be held a few hundred yards from the ExCel centre at the University of East London.
Will the protests turn nasty?
Police are planning a massive operation but so are the protesters. The organisers claim the protests will be peaceful. But some are intent on causing trouble. The Anarchist magazine Class War has told its readers to "get ready to riot".
