Inkwell Institute
International Studies Group
Recently in Toronto there was a meeting of the mindless…a group called the G20……a meeting of the top leaders from 20 different countries that meet to plan the world economy and here is what they decided:
The communiqué called for governments to halve their budget deficits by 2013 and for the ratio of national debt to gross domestic product to be stabilised by 2016. This was seen as a win for Germany and other countries backing deficit reduction. But the document made clear that these targets were not binding and, in a concession to the US, expressed the hope that governments would follow “growth-friendly fiscal consolidation plans”.
In a further bid to walk both sides of the street at the same time, the communiqué declared: “There is a risk that synchronised fiscal adjustment across several major economies could adversely impact the recovery. There is also the risk that failure to implement consolidation where necessary would undermine confidence and hamper growth.”
The G20 resolution on fiscal consolidation allowed all sides to claim a victory even as the differences widen. German chancellor Angela Merkel said the outcome was “more than I expected”. She claimed that the views of continental Europe had prevailed. German officials noted that the US had learned its lesson about writing public letters that sought to change the position of others. In the lead up to the summit, Obama issued a letter to G20 participants warning that too rapid fiscal tightening could impede global recovery. He noted that earlier G20 agreements had pointed to the need for export surplus countries—a reference to Germany and China—to increase domestic demand.
As usual this meeting was nothing more than a photo op for the leaders to appear to be working on solutions when all they were doing is a slow tap dance. The reality is that the world cannot solve these problems it is up to the individual countries to find the answers and to pretend any thing else is just absurd.