Lord,make us selfless,but not yet. That prayer,with apologies to St Augustine,fits many European leaders all too well,as they debate big changes to global economic governance. The pieties have been flying thick and fast,as Europe’s bosses talk of the need to take more heed of emerging economies. Europe,goes the argument,is sympathetic and open to the idea of reforming an order that has been dominated for too long by Western countries. That is why Europe is now so keen on the G20,a hitherto rather obscure group of developed and emerging countries.
This has become the new darling of officials in London,Paris and other EU capitals. Leader after leader has stressed the importance of the G20 summit in London on April 2nd,claiming to see a special European tinge to its agenda to reform the financial system and pay more respect to rising economic powers like China,India and Brazil. Gordon Brown,the summit’s host,says he wants fellow leaders to agree to overhaul bodies such as the IMF and the World Bank so that poorer countries do not simply reject these institutions as mouthpieces for the richest states. Other EU leaders have warmed to this self-righteous theme. It was Europe that demanded a G20 format for the summit in London,President Nicolas Sarkozy of France boasted in December; Europe has spoken with one voice. He says Europeans want a return to a moral capitalism that serves entrepreneurs,not speculators,and new financial rules that create a different place for emerging nations.
Stirring stuff. It must be hoped,therefore,that world leaders can see the joke when they arrive in London,and discover quite how many Europeans it takes to speak with one voice. It is a long list. The worlds top 20,among them the American president,Barack Obama,making his first trip to Europe,will be sitting among a crowd of Europeans jostling for prominence. To begin with,the leaders from Britain,France,Germany and Italy will be present as members of the G7,until recently the elite club of industrialised countries. Then there will be the Czech prime minister,Mirek Topolanek,present as holder of the rotating presidency of the European Union.
He will be flanked by the president of the European Commission,José Manuel Barroso. Also in attendance will be the prime ministers of Spain and the Netherlands,whose countries are not formally members of the G20 but who waged an intense diplomatic battle last autumn to be invited to a preliminary summit in Washington. (The Spanish campaign became a national obsession,with the prime minister at one point flying to Beijing to press his suit,while Spains king lobbied leaders in Latin America.) One summit seat will go to the French politician,Dominique Strauss-Kahn,who now runs the IMF (a post which is traditionally reserved for a European). Another belongs to Mario Draghi,the governor of the Bank of Italy,who chairs the Financial Stability Forum (a body of central bankers and financial regulators dominated by the G7).
It is all rather a paradox. Just as the European Union demands a greater voice on the world stage,because of its supposed unity and openness to new forms of multinational co-operation,individual members of the club fight ever harder for national seats at the table. (In Warsaw,some senior figures grumble that Poland should be at the G20,to represent former communist states.)
Senior Dutch and Spanish officials stoutly make the case for their inclusion. Both have bigger economies than many full G20 members,and are especially hefty players in international finance and banking. But both the Spaniards and Dutch admit that the current crush of Europeans is the worst of all possible worlds. They say they would like a big bang: a move to a single EU representative in the G20 (even in the IMF or on the UN Security Council). But that would mean the biggest EU countries giving up privileged national seats,which is unrealistic.
Among EU diplomats,next to no credence is given to claims by the big countries to speak for the rest of Europe; London,Paris and Frankfurt are rival financial centres with their own ideas of how to run finance. Moreover,in recent weeks contrasting national instincts and antipathies have come to the fore. Talk to French officials,say,and their impatience with the Czech presidency of the EU is barely concealed (this was true even before Mr Sarkozy and Mr Topolanek had a public row about whether it was acceptable for French firms to build cars in the lower-cost Czech Republic). Italy’s lacklustre stewardship of the G7,which it currently steers,is seen by many officials as all too emblematic of the declining fortunes of that body.
The poison of protectionism
Everybody agrees that protectionism is a menace as the economic crisis deepens,but very different approaches are proposed. On February 18th Henri Guaino,a top aide to Mr Sarkozy,called for common agreement on reasonable forms of state intervention and protection,to forestall demands for the most unreasonable and xenophobic forms of protectionism. This is politics as homeopathy: using bad ideas in small doses,in the hope of staving off a nastier ailment. Ministers from places like Germany,Britain and the Nordic countries regularly speak out against protectionism,yet indulge in quiet forms of intervention to prop up favoured banks and industries. The EU competition commissioner (a tough Dutchwoman) has warned governments against stealing jobs from one’s neighbours by bribing multinationals with money to protect national jobs.
In other words,there is a cacophony in Europe. EU leaders say they understand how damaging this is,and how the current overrepresentation of Europe from membership of the G20 to voting rights at the IMF will not be tolerated by other countries for ever. But are they ready to practise what they preach? All the signs are: not yet.
© The Economist Newspaper Limited 2009