A G20 summit rocked by political events in Greece is struggling to maintain forward momentum on global financial reforms amidst Europe’s sovereign debt woes.
Leaders, including Prime Minister Stephen Harper, were to open today’s two-day summit with a session on Europe’s proposed bailout package — and the Greek government’s decision to delay implementation by putting the issue to its citizens in a referendum.
Even as the 19 largest economies in the world, plus the European Union, opened their talks, the government of Greek Prime Minister George Papandreou appeared ready to fall, leaving the problematic December referendum call hanging in the balance.
The very real prospect of Greece leaving the 17-member Eurozone and messily defaulting on its massive debts has global implications, even though the moribund Greek economy accounts for less than two per cent of the Eurozone’s output.
The summit host, French President Nicolas Sarkozy, met with U.S. President Barack Obama before the summit proper and came away claiming agreement on a way forward.
“We have found a common analysis to make the financial world contribute” to the European crisis, Sarkozy said.
But French and German demands for a financial transactions tax have met stiff resistance from the U.S. and Canada, among others, so it was far from clear where the common ground lay.
The fast-moving events left Canadian officials putting up a brave — if somewhat incoherent — front.
A spokesman for the prime minister maintained as the talks began that details of Europe’s proposed $1.4-trillion bailout package need to be completed and swiftly implemented, even amidst the Greek impasse.
“The preference is for action now, sooner rather than later,” Andrew MacDougall said at a briefing just before the opening session of the summit.
Harper’s chief spokesman added that Europe needs to take a stand “that reflects a political willingness to take extraordinary actions to address extraordinary circumstances.”
Canadian officials were at a loss to explain what those extraordinary actions might look like, however, nor were they ready to pronounce on the advisability of Greece going the referendum route.
MacDougall reiterated Canada’s position that Europe pay for its own bailout. “This is to be a European-led and -financed solution.”
Harper’s key message, or fervent hope, appears to be that the summit not be totally derailed by the Eurozone’s current meltdown.
“It’s important that, while we do have the proximate challenges of Europe, that there are the longer-term and medium-term work that the G20 has to do and continue to make progress on,” said MacDougall. “We will make progress on those fronts.”
Finding enough oxygen to fan the G20’s reform flames will be the challenge.
The G20 leaders are supposed to discuss reform of the international monetary system, suppression of volatility in commodity prices, and food security.
The summit slogan — “L’Histoire s’ecrit a Cannes,” or history will be written in Cannes — shouts from posters across this city on the French Riviera, known for its glittering film festival and conspicuous consumption.
But it appeared the summit’s script was being written in Athens.
After weeks of crisis-atmosphere negotiations, a bailout package was achieved just days before the Cannes conflab, only to be deep-sixed by Papandreou’s surprise announcement Monday of a referendum.
A fresh round of emergency meetings this morning in Cannes included officials from Spain and Italy, two heavily indebted Eurozone members who are considered too big for Europe to bail out.
And in Greece, Papandreou was reported to be on the way to see the country’s president as his government appears ready to fall over internal divisions about the referendum plan.
The chairman of the Eurozone’s finance minister meetings, Luxembourg Prime Minister Jean-Claude Juncker, was quoted on German television today saying Greece must clarify its intentions.
“We cannot permanently ride a roller-coaster on Greece; we have to know where things are going, and the Greeks have to tell us where they would like things to go,” said Juncker.
All but lost in the morass is a likely decision here to give the job of mending global finances to Bank of Canada Governor Mark Carney.
Carney is widely reported to be the frontrunner to lead a revamped and beefed-up Financial Stability Board, which will oversee and attempt to enforce reforms in global financial regulation.