Tuesday, June 19, 2012

Middle East: G20 Summit

PJ:  The hard work of campaigning takes a back seat to the hard work of leading.  The US, whose banks actually caused the world economic woes in the first place, is one of the few countries affected by the downturn to see growth, albeit slow growth.  The policies of the Obama administration to stimulate the economy while beginning to address the country's deficit have indeed worked.  It makes you wonder how the economy would be performing if the administration was able to enact more of their policies had the US Congress decided to work with them instead of fighting against every measure proposed.  

Germany, who now has much of the power in the EU to address economic concerns, never really got itself into the hot economic waters that the rest of the western world found themselves simply because they did not over-extend their borrowing and have held fast to their strict banking regulations which, like Canada, helped them recover from the intitial downturn with little pain.  It must be noted  that Germany and Canada have retained their excellent socialized services such as health care and that those programs did not adversely affect their people or economies.  

Countries whose sole perscription for their economic woes have been to address their deficits by using the same austerity perscription aspoused by US conservatives are now in or headed toward double-dip recessions.  Facts are pesky things in politics but the facts point to a better success under the Obama administration's handling of a difficult economy than those of more conservative governments such as Britain and France under the administration of the conservative Sarkosy administration (which has since been voted out of office). 

Al Jazeera

G20 leaders scramble to boost global growth
Final day of summit focuses on reviving economies, restoring confidence and pulling eurozone from brink of disaster.
The leaders of the world's major economies embarked on the final day of the G20 summit determined to kickstart growth and pull the eurozone back from the brink of disaster.
European members gathered on Tuesday were under extraordinary pressure from their international counterparts to loosen their austerity programs and to allow the European Central Bank to open the lending floodgates.

Germany's Angela Merkel, the driving force behind the eurozone's austere determination to privilege deficit busting over stimulus spending, has publicly stood her ground, although US officials say her position is softening.

A draft version of the G20 final statement, which was to be finalized and published by the leaders on Tuesday, suggested that a form of words would be found that would commit the leaders to a pro-growth agenda.

"All G20 members will take the necessary actions to strengthen global growth and restore confidence," it said, vowing that eurozone members would safeguard the stability of the single currency in the face of volatile markets.

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The version seen by the AFP news agency allowed no hint that Merkel or her allies might crumble and allow the ECB to pump out cash or to pool German debt with that of the weaker eurozone members in order to create low-interest eurobonds.
But it contained a phrase that opened up the possibility of more lending and spending if the European economy continues to struggle.
"Should economic conditions deteriorate significantly further, those countries with sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand," the draft reads.

'Job growth'

Officials from eurozone countries also patted themselves on the back for remaining more or less united in the face of pressure from the United States, emerging powers, Britain and a skeptical media.
EU Commission chairman Jose Manuel Barroso bristled at hostile questioning over why his rich continent needed so much support from abroad, declaring: "We are certainly not coming here to receive lessons from nobody."

US President Barack Obama canceled a planned meeting with European G20 members after an official dinner hosted by Mexico's President Felipe Calderon ran long, but White House aides said compromise was possible.

"We're seeing a shift in the European discussion regarding the critical importance of supporting demand and job growth," US Treasury official Lael Brainard said told reporters.

Obama called for Greece to be given more time to get its affairs in order, after parties committed to honoring the terms of its debt write-down agreement won a majority of seats in Sunday's parliamentary election.
But Merkel, fast becoming a hate figure among Greeks, remained unmoved.

"Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed on," she told reporters.

China-US meeting

Progress was made in Los Cabos in boosting the resources available to the International Monetary Fund (IMF) to provide a firewall to protect debt-ridden states from the threat of default if lending costs rise.
IMF chief Christine Lagarde thanked emerging powers, led by China, for pledging enough to bring her pool for emergency loans up to $456bn in exchange for a greater say in IMF affairs.

In addition to summit sessions, the leaders were to hold a series of side meetings, notably a bilateral between Obama and Chinese President Hu Jintao and a possible reschedule of the cancelled US-EU talks.
The summit was due to draw to a close with a ceremony at 2330 GMT, after which Calderon was to address the press.

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