《The Guardian》G20 accord: you go your way, I'll go mine

G20 accord: you go your way, I'll go mine

The Toronto summit shows that now the threat of a second Great Depression has passed, it will take another crisis for the G20 to redress global economic imbalances

A protester kicks a burning police car in Toronto
A protester at the G20 summit kicks a burning police car in Toronto. Will it take another financial conflagration to force the leading economic powers to act? Photograph: Ryan Remiorz/AP
Born out of necessity in the dark days of late 2008, the cracks are beginning to show in the G20. Developed and developing nations were united when confronted with the collapse of world trade and the shrivelling of industrial output but are finding it harder to keep the show on the road now that the immediate crisis is over.
The communique from the weekend's meeting is easily summed up: do your own thing. The Americans cannot persuade the Europeans to hold off from fiscal tightening until the recovery is assured; the Germans and the British think the risks of a sovereign debt crisis are far more serious than the possibility of a double-dip recession.
That was not the only contentious issue this weekend. Canada, Australia, China, India and Japan were unhappy with the idea that their banks – which proved resilient during the financial crisis – should have to pay the levy backed by Washington, Berlin, Paris and London. Again, it was a case of go your own way.

Cause of friction

Meanwhile, the summit danced around a long-standing cause of friction; China's unwillingness to allow its currency – the yuan – to appreciate to a level that might help reduce its trade surplus with the US.In one sense, the public manifestation of these differences should come as no surprise. They were buried during the period of maximum danger – September 2008 to April 2009 – but the G20 no longer believes that the world economy is about to descend into a second Great Depression. For the super-optimists, the return of diplomatic "business as usual" might even be seen as a good thing to the extent that it means normality has returned.
That, though, is a perverse way of looking at things. The G20 was meant to be rather more than a crisis-resolution body; it was meant to be an institution that, through the inclusion of China, India and Saudi Arabia, could better deal with the chronic imbalances in the global economy that caused the crisis in the first place. On the evidence of Toronto, it will take a second, perhaps even bigger, crisis to lead to such an outcome. Barack Obama thinks that remains a possibility despite his emollient words to David Cameron at their bilateral meeting on Saturday.
Before explaining how a second crisis could already be brewing, it's worth sketching out a couple of alternative scenarios. One is that the full effects of the colossal stimulus administered 18 months ago have yet to be felt. Growth will surprise on the upside over the coming months, so policymakers should be fretting about the risks of inflation. Andrew Sentance, the Bank of England monetary policy committee member who voted for an increase in interest rates this month, is from this camp.
Unless the recovery is far stronger and broader than it appears, it is unlikely that the global economy could withstand a synchronised rise in interest rates prompted by an inflation shock. Even if it could, there would only be a short sweet spot before old problems resurfaced: ever bigger surpluses in the export-dependent countries and ever bigger deficits in the US.
A second scenario is the one George Osborne envisages for Britain: a long and relatively joyless period of cold turkey after the excesses of the early and mid-noughties. The Treasury view of the world envisages consumer spending growing only modestly, with investment and exports the main engines of growth. The Germans, the Greeks, the Irish, and the Spanish – not to mention Japan, the US and the fast-growing emerging nations of China – all see their economic future in much the same way. Just how every country in the world can enjoy export-led growth has not yet been explained.
The risks of a period of sub-par growth are acknowledged, but deemed as a price worth paying to keep the financial markets happy. Governments are terrified that they will be punished severely if they fail to take deficit reduction seriously; investors will demand a higher price for buying the bonds that have to be sold to finance the deficit, which in turn drives up long-term interest rates for those home-buyers with fixed-rate mortgages and businesses with bank loans. Better to slash spending and raise taxes so that monetary policy can remain loose. That is the advice Osborne has been getting from Mervyn King, governor of the Bank of England. Jean-Claude Trichet at the European Central Bank thinks the same way.
There are two points to mention here. The first is that King and Trichet, eminent though they may be, are not infallible. King voted to keep interest rates above 5% in summer 2008 even though the economy was already in recession and the strains in the financial system that culminated in the collapse of Lehman Brothers were already in evidence. Trichet seemed oblivious to the threat posed to the whole of the eurozone by the crisis in Greece.
As for the markets, it is certainly true that sovereign debt is their concern this month. But next month they may be getting in a lather about the slow growth caused by the austerity programmes they themselves have necessitated.
The risk is that satisfying the capricious whims of the financial markets leads to policy error and the doomsday scenario. It goes something like this: even before the sovereign debt crisis erupted this spring, there were some tentative signs that the recovery that began in the spring of 2009 was losing momentum. The US has just revised down its growth for the first quarter and has yet to see the pick-up in the labour market that it enjoyed in previous recoveries. Europe's expansion over the winter was barely perceptible. China has been pounding along but Beijing has been seeking to tighten credit conditions after 2009's monetary laxity.

Spare capacity

The sluggish recovery has meant that core inflation in the US and eurozone is already below 1%. They are one recession away from deflation, and perhaps not even that. There is so much spare capacity – particularly in European and North American labour markets – that a marked slowdown in activity rather than falling output would do the trick.Central banks are terrified by the prospect of deflation, not least because none of them – outside of the Bank of Japan – have any experience of coping with it. They would have every right to be worried. Deflation raises the real level of debt; it would hurt consumers, businesses and – crucially – banks.
Having barely survived the near-death of the global financial system in October 2008, central banks have no desire for a repeat performance. They would feel the need to act decisively to prevent a deflationary spiral, but with interest rates already hovering just above zero could only do so through quantitative easing (QE) – creating electronic money through the banking system. To have an impact this would need to be aggressive.
The trouble is that central banks know very little about the effects of QE and the chances of getting it wrong would be high. Attempts to cure deflation could easily turn into the opposite problem: hyperinflation. In terms of chronology, it would pan out like this: sharp slowdown in US and European growth in the second half of 2010. Pressure on heavily indebted banks intensifies as deflation becomes a reality in the first half of 2011. Second leg of the financial and economic crisis in the second half of 2011. G20 get serious in early 2012.



2010-06-28 中國時報 【本報訊】

 一九四四年成立的聯合國,曾被理想主義者譽為二十世紀人類的救星,如今已變成會而不議、議而不決的演講比賽場所。任何爭議,到紐約東河(East River)岸邊那座卅八層大樓附屬的聯大會議廳裏,總是一拖再拖,無法解決。

 經過六十幾年後,各國心知肚明,聯合國尤其是所屬的安全理事會,早已無法反映今日世界的現實局勢。當年安理會常任理事國的五強,除中、美、俄三國外, 英、法的國力已經衰退。另一方面,比它們強大的新興國家,卻須競選剩餘十席的非常任理事國席次;選上後不能連任,以便別的國家也有機會參與。

 聯合國憲章授予安理會對特定國家實施國際制裁(如二○○二年對伊拉克海珊政權),採取維安行動(如二○○九年派軍入駐厄里垂亞Eritrea),甚至出 兵平亂(如一九五二年對北韓)的大權。但整體而言,世人都感覺安理會乃至聯合國本身,正逐漸與現實脫節,需要由一個能反映世界現況的新組織取代。

 十一年前開始的G-20恰好填補了這個空隙。G-20其實只有十九個國家,第二十名成員是歐盟(European Union)。因緣際會,一九九○年代後期,亞洲金融困難引起的經濟問題,促使G-20不得不挺身而出,幫助平息。二○○七年由華爾街開始的真正金融風 暴,因聯合國安理會和經社理事會束手無策,儘管G-20不情不願,也不得不出面收拾這個爛攤子。


 G-20的成員包括:阿根廷、澳洲、巴西、加拿大、中國、法國、德國、印度、印尼、義大利、日本、墨西哥、南韓、俄國、沙烏地、南非、土耳其、英國、美 國、和歐盟。前、昨兩天(六月廿六、廿七日)在加拿大安太略省多倫多舉行高峰會。已經被人淡忘的G-8也擠進來,趁機開個高峰會,希望世人別忘記它而已。

 所謂高峰會者,只是做給各國人民看的把戲,表示他們的國王或主席也好,總理或首相也好,時刻關懷人民福祉。實際上埋頭工作的,是各國財政部長和中央銀行 總裁。去年十月,這十九國財長和央行總裁,外加國際金融機構如世界銀行、國際貨幣基金等,已經在華盛頓開過一次會議,在「加強鞏固、可延續、及平衡成長的 架構(Framework for Strong, Sustainable and Balanced Growth)」的標題下、激烈辯論左列幾項議題:




 國際金融複雜萬分,不是開一兩天會議商討就能解決的。本月四、五兩天,各國財長與央行總裁為準備這次峰會,在南韓釜山又開會。四個月後即今年十月廿二到 廿三日,他們還將在南韓慶州(Gyeongju)繼續討論。然後把結論提交十一月由南韓政府在首爾召集的G-20高峰會,繼續討論,希望做出大家都能接受 的決定。


 預備會並決議設立四個專家組,分別研討財政安全網(Financial Safety Nets)、財政範圍界說(Financial Inclusion)、如何應付氣候變化所需經費(Climate Change Financing)、和不肯合作單位的問題(Non-Cooperative Organizations)。

 這麼引人注目的會議,各國少不得趁機自我吹噓一番,地主國加拿大做得有些過份。加國財政部長Jim Flaherty月初特別為此到紐約舉行記者會,發表談話說:世界各國經濟復甦的過程,以加拿大最快也最成功,可說是「世界經濟復甦的前驅 (leading the world in global economic recovery)」。在此同時,加政府派移民部長Jason Kenney到倫敦,資源部長Christian Paradis到北京,同時舉行招待會,談話內容相同。



G20峰會輸贏大比拼      2010-6-29





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