G-8, G-20 or a G-14?

Marketplace Staff Jun 24, 2010

G-8, G-20 or a G-14?

Marketplace Staff Jun 24, 2010


Kai Ryssdal: With that as background, then, let’s turn to the actual substance of the meetings this weekend. For that we’ve got our European correspondent Stephen Beard on the line from London. Hello, Stephen.

Stephen Beard: Hello, Kai.

Ryssdal: The big issue at the G-8 this weekend is obviously fixing the global economy, sustaining the recovery. What are the details though? How’s it going to happen?

Beard: Well, this brings us down to a rift, which has developed — a trans-Atlantic rift between the U.S. and Europe. The U.S. arguing that we should keep the stimulus going, and various European countries — Germany, in particular — saying no, we should start cutting deficits, government debt is the major threat to recovery.

Ryssdal: As always with at these things, there are nations there who are not technically members of the G-8 and that’s true this time as well, isn’t it?

Beard: Yes, there are several African leaders in Huntsville attending this G-8 meeting, and they’re here to really make the argument that some of the earlier pledges of the G-8, specifically those at Gleneagles in Scotland in 2005, have not been fully honored. There’s quite a discrepancy between the pledges and the aid that has been delivered.

Ryssdal: 2005, of course, a long time ago in economic time.

Beard: Indeed.

Ryssdal: Lastly, Stephen, the G-8, the G-20, am I the only one who’s wondering why they can’t figure out how many people they want to have at the party?

Beard: No, there’s a lot of people asking the same question and wondering whether, in fact, the time has come to abandon the G-7 and the G-8 as something from the past. The G-20, they say, is where the future lies cause this has got all the big, emerging, vibrant economies in it. However, the are some analysts who say there is a problem with the G-20, it’s too big, it’s much harder to manage.

Andrew Hilton of the CSFI think tank, says the G-20 certainly doesn’t seem ready to get to grips with this issue of stimulus versus deficit cutting.

Andrew Hilton: The problem is that it’s terribly, terribly unwieldy. And the members of it have very, very different interests. The Koreans, for instance — who are the chairmen of the G-20 this year — simply aren’t interested in what they see as being a western European and U.S. problem.

The French have been arguing that, in fact, what we probably need is something halfway between the G-8 and the G-20. A G-14 perhaps, which would include the G-8 plus half a dozen of the big, emerging economies. And that, they say, might prove a more effective body for global economic decision making.

Beard: Not too big, not too small, just right. Stephen Beard in London for us. Thank you, Stephen.

Ryssdal: OK, Kai.

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