G20
The Financial Times proposes to publish this FT Report on November 3rd, 2011.
Advertising booking deadline: 21st September, 2011
(Advertising copy deadline: 13th October, 2011)
We plan to include the following features (please note that this list is provisional):
1. Introduction
France is hosting the G20 summit in Cannes at a pivotal moment for the global
economy. The eurozone crisis has reached a danger point and without
resolution threatens the future of Europe’s single currency alongside the health
of the global economy. At the International Monetary Fund annual meetings in
September, finance ministers hoped to have found solutions to the political
problems of Greek debt and spreading contagion by the time of the Cannes
summit. Resolving crisis was not supposed to be the culmination of the French
G20 presidency, but the success of this year’s global economic debates now
rest on political agreements struck here that will stick and that provide a path
towards prosperity in advanced economies.
2. Eurozone Options
The single currency was supposed to eliminate exchange rate risk across the
17 member countries of the eurozone, while budgetary rules enshrined in the
stability and growth pact were supposed to eliminate credit risks. The latter
has disappeared as markets began to doubt the creditworthiness of Greece,
then Ireland, then Portugal and now Spain and Italy and the former is in doubt
as chatter increases over a possible Greek exit from the zone. As such , the
benefits of the single currency now appear diminished and the available
options limited. This article will examine the three main choices available to
the global community regarding the euro: a move to fiscal union, a break-up
and continued muddling through. It will examine each according to its
likelihood, stability and durability.
3. The G20 Mutual Assessment Process
Just as the eurozone is an interdependent economic system with strains
between creditor countries and debtors, so is the global economy. The G20
established a Mutual Assessment Process at the 2009 Pittsburgh summit
designed to foster “strong, stable and balanced” world growth with the help of
the International Monetary Fund. To what extent has this “MAP” succeeded?
Is the global economy destined to achieve the grand G20 aims?
4. The G20 as the “Premier Global Economic Forum”
First it was the G5, then the G7 and now the G20 that was supposed to be the
body which could coordinate international economic discussion and broker
agreements in an inter-dependent system. The G20 has a rationale since it
represents 85 per cent of the global economy, but participants worry that the
group lacks dynamism, achievements and legitimacy. Are these mere teething
troubles or can the G20 provide the forum that allows countries to act in the
world’s collective interest and ultimately each countries own domestic
interests?
5. Progress in Reforming International Financial Regulation
As chair, France wants to finalise the main outstanding global disputes in the
field of international financial regulation. The buffers that large and
systemically important banks will be forced to hold is on the agenda for
Cannes amid a backlash from some banks against the new Basel III rules, due
to be phased in over the rest of this decade. As some countries-such as the UK
seek to enforce quasi-separation between the retail and investment arms of
universal banks and bankers seek a level playing field across jurisdictions, this
article will survey the state of play in financial regulation.
6. France and the G20: Reforming the International Monetary System
This was the centrepiece of the Cannes summit that has now been relegated to
a long-term ambition. Just as international finance has never been so
important, countries have been distracted by a real crisis from musing about
better systems for the next 50 years. France never wanted to displace the dollar
nor establish a new global pegged exchange rate system, but it did want to
start the process of establishing a new international monetary system in 2011.
What is left of the French ambitions?
7. France and the G20: Attacking Volatile Commodity Prices
France has long wanted to combat excessive commodity price volatility and
the experience of soaring oil and food prices in 2011 have reinforced its
ambitions for the Cannes summit. Many other countries have been sceptical
that price movements relate to financial speculation rather than real
movements in global supply and demand. How far is the summit likely to tame
the ups and downs of commodity prices in future.
8. France and the G20: An Economy not so Far From the Eye of the Storm
France had a good Great Recession in 2008-09. Its output fell less than that of
the US, the UK, Germany and Japan, but its subsequent recovery has also been
muted. With relatively little austerity enacted, France briefly became the focus
of the international financial markets in the summer, when investors worried
that it might be the next domino to fall. With unemployment persistently high
and growth weak, what are the prospects for the host nation's economy in the
years ahead.
9. France and the G20: Sarkozy and his Presidential Ambitions
Nicolas Sarkozy wants the G20 summit to project him as a global statesman
on the eve of the 2012 French presidential elections. After the successful
conflict in Libya, his prominent place on the international stage is assured in
2012, but foreign success has not led to domestic popularity. What does the
president need to achieve in Cannes and how will this affect his chances in
next year’s elections.
10. France and the G20: Cannes – The Host City.
The relatively small town of Cannes - famous for its international film festival,
and its wonderful Mediterranean location – will swell in size as world leaders,
officials and the media descend in early November. What preparations is the town
making for the G20 summit and how will a town with a population of only 71,000
cope as the world descends?
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