Maybe the Group of 20 nations can only find unity of action in the face of true crisis. Maybe that’s okay.
It’s just the beginning of a weekend of multinational and bilateral meetings, with various protests and other side shows thrown in, that will constitute the G20 session here in Toronto.
But it’s likely to end up a meeting of no new big agreements. There will be a big tent erected to incorporate all nations on the continue-the-stimulus/rein-in-the-deficits spectrum. Countries will be told to impose bank levies if they feel the need, but no worries if you do not.
There will be a lot of statements of the obvious. For example: fiscal deficits are a real problem that must eventually be dealt with, but not at the expense of cutting the underpinnings from the still questionable global economic recovery.
The bigger issue about that uneven global recovery is one not fully in control of the political powers gathered here. That’s how to get the private sectors to take over and start hiring in real numbers. Solve that and the rest pretty much falls into place.
Behind the non-agreements likely to emerge here is this reality: we are in a place that can afford non-agreement. For all of the remaining problems, the global economy is far enough out of the woods for that.
Of course, it’s not so simple as the U.S. is for stimulus, Germany and the United Kingdom are for cutting deficits. Even in the U.S. the unease, including in Congress, is growing along with the swollen federal debts. Meanwhile, the more deficit-reduction-focused nations are carving out long-term plans for cuts and higher taxes and they’ll have a difficult enough time making them work. No one is just saying halt.
The G20 might be judged too harshly if this turns into a weekend of non-agreements. That’s because it will be seen against the backdrop of seemingly heroic unity of proper actions taken at the height of the credit crisis.
That recent heritage was summed up nicely by the finance minister of host country Canada, Jim Flaherty. “The fact that we’re in the midst of a recovery, however fragile that recovery may be, is due to the efforts of the G20.”
There’s value in these high-level get-togethers, even when they produce only lots of words and few new or different actions by the sovereign participants. They keep the gears well greased for when actual unified action is essential to avert financial disaster.