Commentaries
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Rethinking carbon diplomacy
Climate change was initially billed in a leading role at the G20 meeting in Pittsburgh. Now it looks set to make the briefest of cameo appearances.
Nonetheless, the gathering offers a crucial chance to recast the talks. The United Nations carbon process is in deep trouble and desperately needs help from the top. If the G20 heads of government want to avoid embarrassment at the Copenhagen Summit, they need to start to steer the talks in a new direction.
The first step is to move away from the flawed Kyoto model on which the talks are based. Haggling over overall emissions caps is unproductive. Nations have an incentive to push for targets that are easy to hit — giving themselves plenty of headroom in the event of faster economic growth.
Even then, it is hard to check up on compliance, since countries like China and India lack the ability to track their emissions.
A chance for real change at the G20
For years, policy makers were able to cut and paste statements on global imbalances from one communique to the next. The words were never backed by action. This G20 meeting could very well be different.
Most commentators are not expecting much. Such cynicism is easy to understand. When the IMF tried to bang heads together in 2006 the result was a series of empty pledges. It now makes for comic reading.
There he goes again…
Ho hum! Another G20 summit, another Sarkozy walkout threat.
The French president’s menaces to throw his toys out of his pram have become a regular feature of the run-up to each meeting of the world’s leading economic powers, making them a much debased coinage.  Sarko’s strops are now as routine a precursor to G20 gatherings as the vacuuming of red carpet or the deployment of flower arrangements.
In April, he vowed to storm out of the London G20 summit and refuse to sign the final communique unless France and Germany got their way on binding regulation of all financial markets. He declared victory and dropped the threat before the meeting even began. This time, according to his chief-of-staff, the issue at stake is binding curbs on bankers’ bonuses. It is a strange cause for a conservative politician to be pushing, but with Sarkozy, the emphasis is on politics rather than ideology.
Barroso’s EU vision lacks levers for change
Could the European Union be among the big losers of the global financial crisis?
Despite signs that recession in Europe may be bottoming out, the 27-nation bloc risks emerging from the turmoil with its economic growth potential stunted, its public finances shackled by mountains of debt, and its international influence weakened.
That is the backdrop to Jose Manuel Barroso’s campaign for a second term as president of the executive European Commission. In a manifesto sent to EU lawmakers last week, he warns that unless Europeans shape up to the challenge together, ”Europe will become irrelevant”.
The capital games that banks play
Treasury Secretary Timothy Geithner’s call for the global banks to set aside bigger capital cushions to better absorb losses on souring securities and ailing loans is a good idea. But that alone won’t be enough to prevent another crisis.
Regulators must also clamp down on the kind of AIG-engineered deals that legally enabled German, French, Dutch, Danish and other European banks to dodge existing capital rules and free up some $400 billion on their balance sheets.
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The Wall
