What’s love got to do with it?

February 13, 2009

Though it sounds romantic to spend Valentine’s Day in Rome, I imagine that the ministers attending this weekend’s G7 meeting there will find their task – crafting a solution to the global economic crisis – a sufficiently cold shower to kill off any amorous feelings the setting might have generated.   And if the topic alone weren’t enough to dampen the romance, the infighting amongst G7 governments about what to do to get us out of this mess suggests that this will be a less a Valentine’s Day love-in than something akin to a gathering of dysfunctional and divorce bound married couples.

Let’s start with the Italians, who hold the G8 chair this year.   Their surprising announcement about a month ago that they would seek a  a new legal approach, indeed a “legal standard,” for international finance will have left the UK and several other European governments feeling a bit like jilted lovers.   While Italy is holding court in the G8, the UK holds the reigns in the G20 Group of Finance Ministers, a group with an identical mandate but a wider membership, incorporating a number of large developing countries.   The problem is of course that the G20 has been tasked with coming up with solutions for the financial crisis (and singled out by the previous American administration as the appropriate forum in which to pursue this), but that their meeting is not being held until April.

The Italian finance minister, Giulio Tremonti, appears not to have consulted with the UK (or indeed with other European counterparts) before floating his idea of a legal approach to the Financial Times.  It’s notable that since this announcement, the Italians have been forced to say that they will extend invitations to G20 members to the G8’s big summer meeting in La Maddalena (Sardinia).

This whole story seems to me to suggest two important things about global governance.  First of all, the Europeans absolutely must begin to better coordinate their positions on matters related to finance, even if the underlying European architecture is complicated.  I’ve written about this in the context of the IMF previously, but the inability to even informally coordinate positions for summit meetings seems to me to be pathetic given that France, Germany and Italy (3 out of 7 G7 members) share a currency and a Central Bank.

Secondly, and perhaps even more importantly, it’s time to do something about the proliferation of G’s. By creating the G20 but allowing the G8 to continue to exist, inefficient overlap and competition occur between the two.   All of the original G7/8 members are in the larger club, and they are routinely forced to invite an additional 5 developing countries – China, India, Brazil, Mexico and South Africa – to make the meeting meaningful (though as the leader of one of those countries commented, they are really just invited to the coffee breaks).   It’s time to seriously think about dismantling the G8 in favour of the G20.  Or creating a G13, leaving out some of the smaller G20 members.  Anything but two equally non-transparent international institutions doing the same thing at different points of the year.

Maybe it’s time to extend the mandate of Saint Valentine, whose patronage includes loving couples and bee keepers, to the G20 and G8.  With an appropriate prayer and a little help from Cupid, maybe something would get done this weekend that moves global governance in the right direction.

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One Response to “What’s love got to do with it?”

  1. […] 3, 2009 I recently mentioned my disappointment that European leaders couldn’t seem to coordinate their positions on the […]

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