Global summits matter a great deal to the politicians, advisers and journalists who attend them. But the public pays little attention, which is understandable, as most summits make little impact on their lives and are soon forgotten. Which of the 34 G7/G8 summits since 1975 can you remember: Gleneagles in 2005, perhaps, with its commitments on Africa and, less effectively, on climate change? Houston in 1990? I was there in the intense Texan heat, but I cannot remember a single pledge or phrase in the 6,000-word communiqué. My only memory is of Margaret Thatcher attending a rodeo dressed as if for a Home Counties garden party.
The artificial and often ephemeral nature of summits is Gordon Brown’s dilemma, in the run-up to the G20 meeting in London early next month. He is investing a large amount of energy, time and political capital in a meeting that will last just one day. It dominates his already full diary, with phone calls, bilateral visits, and even a trip to Chile later this month. He has deployed his best and brightest: Baroness Vadera, Jeremy Heywood, Jon Cunliffe and Stewart Wood. They have been engaged in super-networking with the Obama administration and round the world.
At one level, this reflects one of Brown’s great strengths: his grasp of international economic issues. But that is linked with an almost naive belief that a self-evidently unanswerable logical case must lead to agreed solutions. Hence his argument for reform of the international financial institutions and for closer co-ordination of regulators, made long before the onset of the banking crisis, is obviously right, so they must happen.
But it is not enough to be right, as Brown is about international co-ordination. Countries may sign up to grandiose objectives, but not to specific commitments unless it suits them. They are not going to do anything that is against their national interests and/or politically unsaleable at home. Professor David Reynolds notes, in his recent book Summits: Six Meetings That Shaped the 20th Century, that a study of the first 15 G7 summits showed only a third of the 209 promises had been implemented, with the US and France particularly delinquent.
What matters is the balance of power between the participants. Brown has talked about a new Bretton Woods, matching in ambition the July 1944 agreement which led to the creation of the International Monetary Fund, the World Bank and the successful postwar financial system that lasted until the early 1970s. It is easy to be starry-eyed about that meeting because of the magnetic personality of John Maynard Keynes. But as Robert Skidelsky points out in his magisterial biography of the great economist: “Keynes gave the Bretton Woods agreement its distinction not its substance.” The agreement “reflected the views of the American, not the British, Treasury, of [Harry Dexter] White, not Keynes”.
The British team secured amendments to safeguard national interests. The two key players were the US and Britain. But it was ultimately the American vision that prevailed: of updating the gold standard as a means of regulating trade and creating a rule-based, postwar financial order which reinforced the shift of power from the City of London to Wall Street.
Now it is the United States and China that really matter, with Germany next. The European Union has so far been too cautious and disunited to be an effective player in its own right. Thus, Brown is not a dominant player himself, but is more in the role of the respected honest broker. (Or, as Peter Cook said in his 1961 satire on Harold Macmillan: “No nation could be more honest, and . . . no nation could be broker.”) The paradox, and inherent drawback, of the London meeting is that while the old G7/G8 was too small, excluding as it did China, India and Brazil from full membership, the G20 is too big to be an effective negotiating group.
Brown’s energy should, however, receive some reward. The international financial system is too precarious for the meeting to be allowed to fail publicly, as the Westminster conference did in 1933 amid mutual recrimination between Europe and the United States. But President Obama seems more sensitive to international interests than FDR was then. And the draft communiqué, which Brown’s advisers are already carrying around, should contain enough to enable Brown to claim progress in a long-term process.
Yet, on the critical issues, such as further fiscal expansion, convergence of financial regulation (facing strong resistance in Washington), curbing bankers’ bonuses, blacklisting offshore tax havens and recapitalising the international institutions, all we can expect are good intentions: principles rather than binding rules. But the real precondition for recovery is unlikely to be agreed in London, given that it involves Washington and Beijing discussing a greater Chinese contribution and representation in international financial institutions, and more agreement between the two on exchange rates.
Forget the theatre of the event. Brown needs some visible success to validate his repeated claim that this is a global crisis requiring global solutions. A public failure, or disappointment, would undermine his internationalist explanation for Britain’s economic problems, and part of his case for a further fiscal stimulus in the Budget on 22 April. He and Alistair Darling need to be able to say that they are doing the same as other countries. Managing expectations will be very tricky. Grand talk of a “grand bargain” and “global new deal” risks a big let-down.
Not that British voters are expecting much. A Populus poll for the Times published on 10 March showed that a mere one in 20 has “a great deal of confidence” that the G20 meeting would either help the recession here in Britain or help the global economy to recover. A big majority had just “a little confidence”. And they are probably right. The G20 meeting is likely to be remembered as a staging post, rather than a turning point, on the long road to economic recovery.
Peter Riddell is chief political commentator of the Times and a senior fellow of the Institute for Government
Kevin Maguire is away