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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  • rate this
    0

    Comment number 107.

    The 'G' stands for "Gestalt Shift." Now that it must be clear to all that the old paradigm is economically, socially, environmentally, morally, and philosophically bankrupt beyond all hope and beyond all reason.

  • rate this
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    Comment number 106.

    I always thought the G stood got Gravytrain. If you want a laugh go to YouTube and look up Farage and the current crisis. Priceless analysis of the situation. Maybe UKIP have a point and if we stop the Gravy Train G will stand for Growth.

  • rate this
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    Comment number 105.

    47 Retired Engineer

    '...the more and more that some ..run into ..debt then some other ..must be becoming better off by credit!'

    It may sound arrogant of me, but I suspect that apart from some engineers, physicists & mathematicians, most of the world will find your statement way beyond their comprehension.

  • rate this
    0

    Comment number 104.

    101.LiverpoolLuddite
    #95 nautonier Nial is one of the few people talking some sense.

    +
    Yes - Ferguson makes a lucid and coherent case, in part describing how the politicians' courtship with neo - Keynesian economic policies in order to finance & deliver on promises of higher public spending is unsustainable as simply shifts the debt burden onto our children, g children & ggg children

  • rate this
    0

    Comment number 103.

    Really? I thought G stands for a Grave. http://tarot2012.wordpress.com/2012/06/19/yet-another-g20/

  • rate this
    +3

    Comment number 102.

    95 cont - per Reif lecture - Ferguson identifies the 'extractive' mode of institutions regarding 'growth' - interesting thing here - many successful sovereigns are 'undemocratic' as Britain (with its previous rigid class structure) was in early phase of industrial revolution as are BRIC countries today re human rights. Socialist, liberal neo- Keynesians have wrecked western economies with debt

  • rate this
    +2

    Comment number 101.

    #95 nautonier Nial is one of the few people talking some sense.
    #97 Bluesberry
    US attempts to keep focus on EU to cover it's own probs.
    US will probably reach debt ceiling before election, some fun.
    I believe they will go into Iran soon, possibly syria as well.
    US aim as in Libya is to preserve petrodollar.
    Support for dollar as reserve currency is fading rapidly, alternatives to SWIFT underway.

  • rate this
    0

    Comment number 100.

    97.BluesBerry
    "EU, Euro will survive; its officials are smart, endlessly thinking, trying to solve;"
    Not sure "smart" is word a lot of people would use.
    Trying to solve a problem, in part, of their own making, but with a predetermind outcome required that may not be to the benefit of the populas.

  • rate this
    +2

    Comment number 99.

    GROWTH is yet another red herring

    10% world growth for the next 5 years would not put a dent in the 100s of TRILLIONS of DERIVATIVES.....TOXIC DEBT / WEAPONS OF MASS FINANCIAL DESTRUCTIONS and you well know that Stephanie Flanders

  • rate this
    +1

    Comment number 98.

    I may be ignorant on global financial affairs,

    However the economists who suggest getting out of debt by creating more debt, is way beyond my understanding of simple arithmetic.

  • rate this
    +2

    Comment number 97.

    November presidential election: US will face cuts - austere & very punishing, more to come in January. I hope all military personnel returned from combat have turned in weapons - not hidden some for poverty, unemployment. EU, Euro will survive; its officials are smart, endlessly thinking, trying to solve; but US makes its money from war - oil & defence industry. Where can it make war next?

  • rate this
    0

    Comment number 96.

    #91 Hey Doctor Bob
    I agree.
    Greece needs more money. Spain needs lots more. Italy suggesting an automatic semi bailout, jesus. andFrance just achieved a socialist majority. Who is putting money in,
    I would like that we here put in place some of the restrictions on govt spending that they have in Germany we would not be so deep in the mire.

  • rate this
    +1

    Comment number 95.

    http://www.bbc.co.uk/podcasts/series/reith

    For those who may have missed Niall Ferguson's contribution this morning on R4 - the Reif lecture is well worth a listen.
    IMWO, Euro crisis is simply the EU adjusting to the global competition - EU asset values & Euro are over-valued - there has to be a correction - Eurocrats unwilling to print Euros, re-structure & devalue as is the 'soft landing'.

  • rate this
    0

    Comment number 94.

    86.Chris London
    Perhaps they have found the elusive "G" spot!!!!!


    => What? THIS lot? I doubt they'd make the finals for the Upper Class Twit of the Year.

  • rate this
    +1

    Comment number 93.

    Britain should be scared - little brothers to American policies: UK sandwiched - 2 sides of the Atlantic. Only 4/17 EU leaders are at G-20. The deep ideas from EU will not likely come til full EU Summit at month-end. G-20 may stand for growth within austerity, but if this is the case, you might as well call it "20" because growth with austerity is incongruous.

  • rate this
    +3

    Comment number 92.

    Greek election = stop bracing for financial Armageddon in EU - but where else may it come from, tip-toeing in like death itself? What country is biggest threat to global chaos?
    - has hugest debt & deficit, but has done NOTHING, except upped Defence Spending
    - originated derivative rot & it by-products
    - printed(s) bills until the ink runs dry.
    Keep your eyes on EU at your own peril.

  • rate this
    +2

    Comment number 91.

    87.LiverpoolLuddite
    I still believe yhe euro is close to breakup


    >George Soros (and I) would agree. It depends how Germany does. With recession biting, Germany might find its exports down and in financial trouble itself. They reckon about September/October time.

    I take heart in the fact that Soros knows more what it's about than politicians.

  • rate this
    +2

    Comment number 90.

    LiverpoolLuddite
    The EU and the Euro are supported by the biggest ponzi scheme. This is why they don't want Greece to fold for if they did the whole lot would come tumbling down. Others who got caught with these type of investments have gone away for a long time. Perhaps these politicans and bureaucrats could face trail for crimes against the economy?

  • rate this
    +1

    Comment number 89.

    Expectations of growth will have to be severely lowered for a while - just keep our heads above water. The age of abundance is over. The age of people transferring masses of stuff from the mall to their homes will be in abeyance for a while. Expectations of 2 or 3% pa are cuckoo-land stuff. The moneyed population of the world won't increase to buy all this stuff nations want to foist on people.

  • rate this
    -1

    Comment number 88.

    re#80
    Agreed. But it would still - probably - be a Coalition buster as some LibDems are very keen on the EU.

    I actually see our EU position as being advantageous: not in the Euro but in the market: you could say we are nicely offshored for the benefit of the rest of the world.

 

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