A Drama In Disarray: G20 Summit In Cannes
By Farooque Chowdhury
06 November, 2011
Countercurrents.org
The G20 summit in Cannes has concluded in disarray and without details in “agreements”. Leaders were unable to agree upon financing the IMF to help advanced capitalist countries in distress. No G20 state is willing to participate in the euro zone bailout fund.
However, one “achievement” is there instead of a total failure: interventions in two democracies – Greece and Italy – appeared close to coup although a G20 leader disagreed. So, all should agree with the leader: These are not coups de grace, but a mere attempt to change government or press government to listen to interventionists for the sake of markets. Italy and Greece have been made to submit to creditors’ dictation.
The Cannes Crisis Festival, considered a flop by some commentators, saw little progress on resolving Europe’s debt crisis. The leaders, as Angela Merkel acknowledged, had failed to interest any of the G20 state in investing in a new initiative. From her statement it appeared that China and Russia bargained a bit. Russia and China demand IMF to secure their investments. A strange symptom within a world structured along a NATO-WB-IMF-WTO design.
But Cannes summit has failed to raise market confidence. Stock markets in New York, Frankfurt and Paris initially expressed their reaction by moving down.
The continuing eurozone debt crisis dominated summit had the hope to increase IMF resources by $250bn to more than $1tn. But the hope has not touched this material world. The hope has been kept suspended for G20 finance ministers with the hope to be materialized in next February.
The summit communiqué made commitment to move “more rapidly” towards greater exchange rate flexibility, agreed to give IMF more money, welcomed Italy’s “wisdom” to invite the IMF to monitor its reforms, and called on countries with strong public finances to take steps to boost domestic demand.
“Dark clouds, Ban Ki-moon warned at an event with main stream labor leaders in Cannes, “have gathered once again over the global economy. […M]any people cannot even see the light at the end of a long, long tunnel.” With a similar mood, David Cameron said the crisis was having a “chilling effect” on his country’s economy. He hinted at worse to come, describing this as only “a stage of the global crisis”. The UK leader felt that in the interest of his country the eurozone crisis should be sorted out as rapidly as possible.
For playing down failure to make progress on major issues Nicolas Sarkozy tried to appear as a warrior for the cause of Robin Hood tax. Sarkozy expressed his willingness to “fight to defend Europe and the euro” as he said in a post-summit press conference.
Sarkozy said: We cannot accept the explosion of the euro, which would mean the explosion of Europe. He has assured that the G20 had agreed to boost the IMF. He made a forecast: G20 would agree by February. The French leader denied the demands on Silvio Berlusconi represented almost an IMF coup: “We never wanted to change governments, either in Greece or in Italy. That is not our role; that is not our idea of democracy.” However, he said that George Papandreou’s decision not to tell fellow EU leaders about plans to hold a referendum was “shocking”. Barack Obama reminded Greek and Italian parliaments to take decisive action. The US leader praised increased scrutiny of Italy as a step in the right direction.
The summit deliberations showed Britain’s inability to take burden. Cameron admitted that the G20 summit had failed to resolve the eurozone debt crisis. He went on: “I’m not going to pretend all of the problems in the eurozone have been fixed, they haven’t.” Cameron feels, “[t]he problem is that not all of the details... have been put in place.” He assured British taxpayers that increasing UK contributions to the IMF would not put their “money at risk”, and the money would not support a eurozone bailout. He revealed a fact: Contributing money to support the IMF was, as a trading nation, “in our interests”. He also suggested that the issue of increasing contribution to the IMF would not be put on a vote in the Commons. It appears that UK capital does not have interest in euro bail out, but in expansion of global business.
The Greek drama annoyed the Cannes festival as Papandreou announced to hold a referendum on austerity package being pushed through Greece’s throat. The political move panicked markets around the world and the G20 leaders. But dominating capital’s dictation made Papandreou step back. He threw away referendum plan to seek people’s mandate on the austerity plan that includes sell-off of public property. The Papandreou government sought confidence in parliament after alleged horse trading and survived a confidence vote.
Italy with its near-nonexistent growth was an amazing player in the Cannes show. Rome now threatens to carry Europe’s debt crisis up to a level that can fall on the entire earth’s capitalist economy, and make it spin listlessly. Italy’s borrowing rates are rising to the levels that forced the PIG to seek bailout “benevolence” in all its crudeness. With a $2.5 trillion debt Italy has agreed to let the IMF monitor its implementation of austerity program.
But, as a Reuter’s story described, the “fierce pressure from financial markets and European peers” was not a humiliation for Berlusconi as he agreed to have the IMF and the EU monitors. It was reported that Berlusconi “was summoned to a late-night hotel meeting with Merkel, Sarkozy, the IMF director general Christine Lagarde and Obama, where he was instructed to bring Italy under […] IMF surveillance to ensure he implements […] measures, including changes to the labor market, […] the sell-off of state assets.” However, Berlusconi tried to minimize the satiric-political impact of the decision, saying that it had been requested by Italy rather than imposed by world leaders. He boasted: He had invited the IMF to offer advice; he had rejected an offer of IMF funds. He claimed that his country was more solid than France or the UK. “Italian restaurants and vacation spots are always full. Nobody has the sense the country is in a crisis”, said the scandal-ridden Italian leader.
The IMF bosses will audit Italy’s books of accounts to make sure the austerity measures are implemented with brute force. An EC team will also supervise. Moreover, the Media Mughal of Italy with a history of not standing by promises had to make a new promise to European leaders in Cannes, the famous film festival place that sees attractive film figures: a confidence motion within 15 days in Roman Senate. These developments achieved by external and Italian finance elites impacted Italian politics. Desertions from coalition government of Berlusconi have made its life uncertain.
Shall there be horse trading in the country’s political market dominated by the rich? Shall the trade be called democratic distribution of patronage by one of the richest men of Italy? All, from Catholic Church to business, want Berlusconi’s exit. But the democratic warrior knows well that Italy is not Libya. This perception has led him to brush aside the desire of powerful interests. He has already found traitors to the country as he described party rebels. Have ghosts of fallen dictators overshadowed the character of Italian comedy in a Roman Holiday? However, there are all the possibilities of Berlusconi’s Mubarak Moment.
The world now is a bit different whatever the Italian leader claims. The IMF bosses do not only dictate the poor in the South. They are now showing muscles in advanced capitalist countries. Now, after Greek Tragedy and Italy Incident, the ruling elites, many of them are pure robbers and plunderers, of IMF-dictated-poor countries should get “rid” of sense of shame. The founding fathers of the Bretton Woods institutions had not imagined that one day in future their institutions designed to subdue the poor world would discipline advanced capitalist countries. Even, Marx had not imagined. Has something rotten down in the core of capitalism? The IMF is disciplining Ireland, Portugal and Greece, “dignified” capitalist countries not “shameless” like the poor countries.
Russia made a major advance in the summit as the country will be allowed into the WTO, “the biggest step in world trade liberalization since China joined a decade ago.” The step will have implication on present major players in the world trade club. China’s increasing power was evident in the summit as the country resisted calls to allow its currency to appreciate. It now appears that these two countries are making their voices heard in the gathering of the powerful and aspiring-powerful.
The disarrayed drama, the unwillingness to fund IMF, the flexing of power reaching close to coup in advanced capitalist countries, the humiliations, etc. raise a few fundamental questions related to capitalist world system that was in euphoria with a brute onslaught named globalization a few years back.
Dhaka based free lancer Farooque Chowdhury contributes on socioeconomic issues.
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