Sunday 19 Aug 2018 | 10:15 | SYDNEY
Sunday 19 Aug 2018 | 10:15 | SYDNEY

Cannes can't (save the euro)


Mark Thirlwell

8 November 2011 14:40

It's hard to stay optimistic about the G20.

Getting a big success out of last week’s summit was always going to be a tough ask and in the end, the initial take on Cannes has been that it largely lived down to expectations. Some have gone further and described the meeting as 'comically irrelevant'.

Initially, pessimists had worried about the ambitious agenda of the French presidency and whether, as a result, the G20 was in danger of heading down the APEC route of combining a rapidly expanding agenda with a failure to deliver. But as the crisis in the eurozone deepened, it became clear that the meeting would end up being judged on its contribution to dealing with Europe's overlapping debt, banking and growth problems.

To a large extent, this was inevitable: after all, it would be very strange if the self-designated 'premier forum' for international cooperation did not having anything to say about one of the most pressing challenges to global economic stability. In this regard, criticisms of the euro crisis 'hijacking' the G20 rather miss the point. 

Still, linking the success of the meeting at Cannes with the success of measures to deal with the eurozone mess was also problematic. The problems facing the eurozone are deep, structural, and certainly not amendable to a quick fix, let alone (less than) a couple of days of summitry. They also depend on a great deal of political compromise among the 17 economies of the eurozone. Realistically, the G20 meeting could do little about most of this. And little is pretty much what it achieved.

It also achieved little on another major item on the international economic policy agenda – the quest for global rebalancing and the ambitions set out in the Pittsburgh 'Framework for strong, sustainable and balanced growth'. As the IMF had pointed out in its briefing to the October meeting of G20 Finance Ministers in Paris, the 'dual rebalancing acts needed to secure strong, sustainable and balanced growth...have stalled'. Despite the good intentions of the Cannes Action Plan, last week’s meeting hasn't done much change this. 

The final communiqué has been criticised for a shortage of hard dollar commitments and a lack of specific promises, although this is arguably par for the course for international summitry. Still, there was some modest progress across a range of issues.

As I argued back in February, we need to stay realistic about what the G20 can deliver, given the scale of the challenges it faces. For all its flaws, it's still the best forum that the world economy has on offer right now.