Just A Few Hours to Save the World at the G-20

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President Barack Obama, Italian Prime Minister Silvio Berlusconi and Russian President Dmitry Medvedev fool around before they pose for a family photo during the G-20 summit

To what extent has the outcome of today's meeting of 19 leading economies and the European Union already been agreed? That's the $2 trillion question. The sum is the proposed level of fiscal stimulus by G-20 nations identified in an early leaked draft of the final communiqué expected later today. But amid squabbling in the run-up to the meeting, with France and Germany especially vocal in their objections to making specific commitments, the figure has been recast as the collated estimate of measures already planned as the world tries to stave off a prolonged downturn, and participants are not being pressurized to agree to specific numbers. The latest leaked draft communiqué, seen by the news agency Reuters, makes no firm pledges on additional fiscal stimulus, saying simply "We are committed to deliver the scale of sustained effort necessary to restore growth." (See pictures of the G-20 protests.)

If you believe some sources, the sherpas — the diplomats tasked with preparations for the meeting — have already done all the heavy lifting and the leaders have come together only to dot i's and cross t's. But after yesterday's dramatic double act by German Chancellor Angela Merkel and French President Nicolas Sarkozy, who summoned press to a swanky hotel in London's Knightsbridge to identify their own "non-negotiable red lines" to quote the French politician's martial phrase, nobody can confidently rule out last-minute spats. Indeed, although the concluding press conference has been scheduled for 3.30pm British summer time, delays are already rumored. (Read "The G-20's Hidden Issue: A Global Trade Imbalance".)

With the fiscal stimulus issue neatly sidelined, the crucial sticking points are around how to remedy the structural and regulatory problems that led to the crisis. Merkel and Sarkozy expressed fears at their joint appearance that there will be insufficient commitment to regulating the financial markets and to clamping down on tax havens. A list of such havens could be published at the summit "or in a couple of days," said Sarkozy yesterday, but further delay would be unacceptable. British officials say they support publication of such a list. The point of disagreement is on timing, but there's optimism this rift can easily been overcome.

The leaders in their motorcades swept out of central London and into the bleaker reaches of the city's eastern sprawl at first light this morning. After sporadic violence from protestors yesterday and amid tight anti-terror precautions, police were out in force along the otherwise deserted route. The delegations were served breakfast before being lined up for the obligatory family snap and then sitting down for business. They have 2 hours and 40 minutes before lunch and one hour after lunch to finalize their plans. Because many of the chief participants need to depart London this evening for tomorrow's NATO summit in France the possibility of talks going into the night are slim.

So with so little time "to change the world" — Merkel's stated ambition for the G-20 meeting — what concrete proposals are likely to be agreed? Officials confidently predict that there will be progress in reforming resources for financial institutions. In particular, they expect more than $100 billion in support for trade finance to be agreed, along with a doubling of resources for the IMF. Japan and the EU have already promised additional funds and more countries are expected to pledge additional money during the afternoon. The details on financial regulation are still being discussed but a 7-page addendum to the communique has already been prepared, suggesting that the bulk of detailed regulatory reform was agreed in advance. There may yet be sticking points, but on one thing at least, there's consensus: the politicians here want to come away with a real agreement. Jittery markets and anxious voters won't appreciate a fudge.

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