The only thing we can be sure about is we, the British taxpayers, will be picking up the bill. As good hosts we will buying the lunches and the dinners, the limo trips and the goody bags. Londoners will find it difficult to get round their city as barriers are put in place and the menacing security clamp comes down.Only go to London this week if you cannot avoid it.
The main players all want something different from the meeting. China wants her financial strength recognised by more votes and more voice in the big international financial fora like the IMF. If you are paying more of the bills you expect some say. Germany and France want to bridle Anglo Saxon capitalism, using this opportunity to insist on worldwide regulation of hedge funds and shadow banks. Spendthrift America wants to persuade all the others to spend like there’s no tomorrow to make US borrowing look more reasonable. The UK wants to regulate, tax and spend on heroic scales all round the world.
All are likely to be disappointed. China will be told she is important, and will have more power, but not yet. Germany and France will be told there will be regulatory review, but there will be no rush to put in place new rules that work. Both the US and the UK will have to announce again the stimulus packages already announced long before the meeting, as n o-one seems to want to deliver a new one this week, or if they do fears the markets will not accept yet more public borrowing to pay for it.
They will all agree that this is no time to introduce protectionism, when world trade is slumping. They will not mean it. The US is considering subsidy to its auto industry. The UK and the US are up to their necks in subsidies and favourable financings for their banks. The UK has already allowed a big devaluation of the currency to try to steal a march, and several of the other big economic powers would now like their currencies to fall to make things easier. The UK talks of “British jobs for British workers” and the US wraps policies in the flag.
They will also all agree to attack the offshore centres around the world from Jersey to the Bahamas and from Monaco to Bermuda. They are small enough to gang up on, and offer the prospect of easy pickings for the tax hungry large powers. Even this may defeat them, as the tax havens may prove fleet of foot in offering something whilst preserving their special advantage.
I don’t think we in Wokingham should expect the world to be transformed or the economic problems to vanish like magic this week. We can be sure we will just collectively be more in debt at the end of the week than at the beginning.