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14 Nov, 2008 23:09

Light mood ahead of heavy talks

Leaders from the world's twenty richest countries have arrived in Washington to discuss the global financial meltdown. Saturday's one-day summit could be the first step in reforming the world's economy and banking system.

Opening the meeting, George Bush said that when they sit at the table, they’ll‘bring clear priorities:

“Tomorrow’s discussion will be the first in a series of meetings. We’ll focus on the key five objectives: understanding the causes of the global crisis, reviewing the effectiveness of our responses thus far, identifying principles for reforming our financial and regulatory systems, launching a specific action plan to implement those principles,and reaffirming our conviction that free market principles offer the surest path to the lasting prosperity.”

What can we expect from G20 summit?

At the G20 summit that has started in Washington no less than 85 per cent of the world's economy and two-thirds of its population are represented. And there are hopes that this one meeting will provide the solutions to the worst crisis in decades.

The current economic crisis is a story for the ages. And like every good drama it has a robust plot line. First up is a build-up of action

“What happened was the housing bubble collapsed. That led to large losses in banks and financial institutions worldwide. Now this created the financial crisis,” said Dean Baker, Co-Director of the Centre for Economic and Policy Research, Washington D.C.

And every good story needs a victim.

“Even countries that had nothing to do with this, that weren’t buying the assets, they were subject to this as well,” he added.

It also needs a villain. Paul Craig Roberts was one of Ronald Reagan’s economic masters and although he is no longer in the business of reviving an economy, he too had something to say.

“Wall Street is to blame, the greed and the arrogance, but also the US government. The whole thing is a mess,” said Roberts.

“The Wall Street people are really front and centre in this. They made tons of money while this was going on and they are being completely irresponsible in their conduct,” he concluded.
And it seems the world has had enough.

“We want to change the rules of the game in the financial world,” said French president, Nicolas Sarkozy.

“The Washington meeting cannot fail,” stated Jose Manuel Barroso, EU Commission President.

“The rest of the world has demanded that Washington meet to reconsider the financial system,” Roberts explained.

Some would have us think that the US financial system has rained on the rest of the world’s parade. The G20 summit may be a climax to this global saga. However, as the US stock market continues to sink, it is clear that  the rest of the world has struggled to keep afloat…and now, it has made demands for a new kind of safety net.

But can the world’s leaders really solve this global crisis in a matter of days?

“I really have low expectations. Even if they do nothing but sit at a table for three hours, they’ll come out and say that we’ve had a really good discussion, whether there’s substance to that something is a different question,” said Baker. 

Others stand firm that this meeting is one that will alter the present and dramatically change the future

“I really believe we are living through a historic moment,” said Barroso.