13 January 2012
Cannes, France, a cosmopolitan Mediterranean village of nearly 72,000, was the center of the financial cosmos for approximately 24 hours, as leaders from the world’s 20 top economies convened to address the Euro crisis that has only worsened since last year’s Summit in Seoul.
Subject to the whims of a fiscally warped, unabashed prime minister (an older Zorba of sorts) and abnormally grey skies, leaders tested just how much summitry they could endure, and how many surprises they could digest, in a casino-turned-conference-center on the French Riviera.
The cold November Summit wasn’t a big fat Greek monopoly, per se, but the on-again-off-again leadership (from a non-Italian, non-G20 member, nonetheless) commissioned substantial attention from the group.
“I think since 1 pm the leaders have been focusing too much on Greece,” Yves Tiberghien, associate professor of political science at the University of British Columbia, said.
The agenda, packed with more than a dozen non-Greek items to pick at during working meals, was tackled as planned following Papandreou’s bold declaration (and then subdued retreat) that the people of Greece would vote on a bailout package that would impact not only the financial future of their country, but the global economy at large.
The Diplomatic Courier turned to experts in Cannes to break down the wins and losses of this fall’s G20 Summit. Here’s what shouldn’t be missed:
Andrew Cooper, professor of political science at the University of Waterloo and fellow at the Centre for International Governance Innovation, located in Canada, called the eve of the Summit “Greek day” and said that it was a “distraction in many ways from what [was] going on behind the scenes at the G20.”
Greek day robbed the Summit of its “network component” he said, in reference to the death by neglect of Sarkozy’s Financial Transaction Tax (FTT).
But Athens’ influence was not all bad. The specter of a global financial meltdown à la 2008 reinvigorated this November’s G20, and reminded its participants of the familiar, though not so nostalgic urgency of three years ago.
“In the past few G20’s we’ve lost that intensity, and I think one of the effects of the Greek situation is that [it] has brought that back,” Cooper said.
Victoria Panova, a political analyst from the Moscow State Institute of International Relations, explained the low profiles of Medvedev and the BRICS at this year’s summit. She said the Kremlin, a self-contained mecca in the heart of Moscow, cannot steer the agenda unless it’s allied with other powerful members, like the BRICS. But, according to Panova, “there are a number of [G20] issues within BRICS that are not completely compatible, such as climate change and energy security.”
This year, the only issue the BRICS undertook as a team — and with some success — was convincing the West to increase the developing bloc’s share of the IMF’s Special Drawing Rights (SDR).
Dries Lesage, professor of political science at Ghent University, located in Belgium, drew attention to the prospect of a new financial relationship between China and the European Union (EU).
Peking’s politburo initially signaled that it might invest billions into its biggest trading partner’s strengthened Eurozone bailout fund — the European Financial Stability Fund (EFSF) — to insure against future debt crises, but has since decided to offer only criticism.
Mabruk Kabir, a civil society team member at The World Bank, said, from the developing world’s point of view, that one of its main priorities in Cannes was to curb tax evasion and elicit capital flows, which together account for upwards of $1 trillion in lost tax revenues. India alone loses an estimated $400 billion annually to illicit capital flows, he added.
Kabir said progress had been made after a tax evasion treaty was signed on the first day of the Summit. The end goal, he added, is to divert illicit funds into the formal economy where they can support development projects.
But treaties and similar non-binding agreements notwithstanding, the group’s real progress will be tracked not by immediate high fives from heads of state, but in the months that follow an action plan developed during a few distracted hours in France.
This article was originally published in the December 2011 Global Cities issue.