April 3, 2009
After much horse-trading between the continental Europeans and the Anglo-Saxons, the G20 Summit in London has ended with an “almost historic compromise” (Angela Merkel). Known for their reluctance to regulate financial markets and to rein in hedge-funds or rating agencies, the American and British teams at the summit were coaxed by the Sarkozy-Merkel team to accept the creation of a new global financial architecture, one less forgiving with international speculators and tax dodgers in search of fiscal paradises.
In exchange for accepting increased oversight, the leaders present at the summit have agreed to inject a $1 trillion-plus economic stimulus package into the global economy. This would mainly benefit emerging economies and poverty-stricken countries from Europe, Latin America, Asia and Africa. The money is to be distributed through the IMF, whose president Dominique Strauss-Kahn had demanded as early as last autumn that more bailout funds be made available to his organisation.
Behind the scenes, US President Barack Obama has had to mediate sharp differences of opinion between French President Nicolas Sarkozy and Chinese President Hu Jintao. The rift developed around the wording concerning increased supervision of tax havens, which China, with Macao and Hong Kong in mind, proved rather unwilling to back. The seriousness of the first global economic crisis, however, has prompted all participants to compromise and put aside their various differences, in favour of adopting measures aimed at restoring worldwide economic growth to a projected 4 % in 2010 and the creation of millions of new jobs.
The London summit has also confirmed the end of the “New American Century”, the neo-conservative project advocating the United States’ continued economic, military and diplomatic leadership of world affairs. During the George W. Bush presidency, the project became official White House policy. Its adoption was ultimately responsible for the military intervention in Irak, the failed “Orange” revolutions in Ukraine, Georgia and even Romania and for the missile defence shield aimed at containing Russia.
These days, the Obama Administration has a more realistic international agenda : “it is my responsibility to lead America into recognising that its interests, its fate is tied up with the larger world”(Barack Obama, in The New York Times). Indeed, helping the American people realise that the US can no longer pretend to lead the world, nor withdraw from it, could potentially prove to be Obama’s most important contribution to American political history.Florian Pantazi