G20: now the G stands for growth

 

The Greek election result means the G20 leaders gathered in Mexico can stop bracing themselves for financial Armageddon in Europe - at least for a while.

Now all they have to worry about is the risk of another global recession.

US officials here in Los Cabos talk about the Europeans needing to move forward as fast as possible in three areas: moving towards banking union; making their financial firewall more credible; and doing more to support growth.

British officials say similar things, only they sound more scared. After all, we're a lot nearer to the crisis than the Americans are and, let's face it, our recovery seems a lot easier to derail.

The Brits also talk less about the need to support growth, perhaps because they don't want to risk sounding like French President Francois Hollande.

You can expect Europe's big three reform priorities to be discussed plenty here, but even before the Greek election, leaders from both sides of the Atlantic had warned that they did not expect the eurozone to make any concrete new commitments in Los Cabos.

The four most important eurozone leaders are here, but 13 are not. With or without more clarity from Greece, no-one is expecting much movement from the eurozone until the full European summit at the end of the month, though we may get some hints after Europe's new Gang of Four - the leaders of Germany, France Spain and Italy - meet briefly on Friday.

So the "G" in G20 may not stand for Greece this week after all. Instead, it is likely to stand for growth - preferably the global variety.

Most of the eurozone has been in recession, or close to it, since the last G20 Summit in Cannes. So has the UK. Most worrying of all, there are now clear signs that the recovery is losing momentum, not just in America but in China, India and Brazil. All of these countries had been playing a crucial role in keeping the global economy moving forward.

With the November presidential election getting closer, US officials are relieved to think the threat of a financial meltdown in Europe has been deferred. But President Obama does not want anyone to relax.

The sun is shining here, and the agenda at this summit looks lighter than it has been for years. But his message will be that the financial storm clouds are still hovering, and the risks of yet another global slowdown are all too real.

 
Stephanie Flanders, Economics editor Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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