Thursday, March 12, 2009

G20 Damage Limitation

How a disaster looks

We are about to shell out £50m on a disaster. That's what it's costing UK taxpayers to stage the doomed G20 bunfight in London.

Now, according to Caroline Flint, the Europe Minister, “the costs of having the summit are far outweighed by the risks involved in not having it at all.” But not for the first time, Caro's got it completely the wrong way round: the risks of having the G20 meeting far outweigh any prospective return on the costs.

Because this meeting is putting up in huge lights some fundamental and scary disagreements on how to tackle the crisis.

In the red corner we have Obama and Gordo, who want to spend us to recovery. And in the blue corner we have Frau M and Sarko, who say we've already done enough spending for now, and we should concentrate instead on rounding up the Anglo-American banking spivs who got us into the mess in the first place. It could get very ugly.

C4 News dug out some newsreel of the last time a British government staged one of these economic disaster summits - the World Monetary and Economic Conference which took place London's Geological Museum in 1933. That was a real hoot, with 66 participating nations, eight Prime Ministers, 20 Foreign Ministers, 80 assorted Finance and other Cabinet Ministers and heads of central banks. Their opening statements alone took a fortnight to complete, and according to Time's account:

"At least one extra King will be there, lean, white-chinned Feisal of Irak, come to watch proceedings, coach his delegates from the sidelines, and renew his acquaintance with two of Britain's most photographed beauties: Lady Louis Mountbatten and the Marchioness of Milford Haven, who visited his arid kingdom unescorted last November in search of desert thrills."

Unescorted thrill-seeking beauties there may have been, but no US President - Roosevelt deliberately stayed away and stymied any effective international agreement.

The meeting was a disaster and it spelled out the message for all to see - it's everyone for himself. The beggar-my-neighbour 30s duly unfolded.

So why are we risking the same thing again now?

True, the saintly one is coming, so that's some advance on 1933. But after all the hype - whipped up especially by Gordo - it's now quite clear the meeting will flop. There will be no substantive agreement on anything, and instead a high risk of entirely contradictory messages spinning off in all directions. Gawd knows how our febrile financial markets will react.

The organisers finally seem to have realised this and panic has set in. The summit is fast becoming a huge damage limitation exercise. People like the appalling Molloch-Brown are appearing on Andy Marr to talk down expectations: this is just a first - though important - step... it's important that we maintain a frank dialogue... blah, blah.

But did any of these people seriously imagine this summit was ever going to be more than another grandstanding opportunity?

Grandstanding on this scale is neither something our delicate public finances can afford, nor something our delicate financial markets can risk.

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