The money men meet

The G20 Finance Ministers and Central Bank Governors met in London today, to thrash out the outlines of the eventual full summit on April 2. The official communique which sums this up thus gives us the best sense of what will - and won't - be achieved in three weeks time.

The biggest achivement seems to be agreement on more cash and responsibilities for the IMF, which will probably be accompanied by its restructuring to bring on board more members of the developing world. Its always nice to hear a commitment "to fight all forms of protectionism and maintain open trade and investment", but there was no sense of momentum to revive the quietly dying Doha round of WTO talks. Europe, meanwhile seems to have won the 'further stimulus vs financial regulation' transatlantic squabble as to the focus of the meeting. The "key priority" is to tackle the "problems in the financial system head on", while the wording concerning fiscal expansion is self-congratulatory, and it is to be 'sustained' rather than expanded.

The G20, in a best case senario, will boost the flagging global economy not so much by the quality of the proposals in and of themselves, but by reassuring markets that the world's leading nations are indeed capable of coordinating an effective response to the crisis. Simply reequipping the IMF will not be enough, at least not after US National Economic Council Director Larry Summers made plain the view of the American administration that a further global stimulus is needed, and brought the divided attitude of the developed world clearly into the open.

Broadening our perspective then, and the long-term outcome of the G20 talks is set to be an entrenching of the developing world in the highest mechanisms of global governance, with the G20 itself emerging as the undisputed first forum for tackling the pressing problems of global economics, and a reshaped IMF being its primary result. But if the talks held so far are any indication, the summit in April will also reveal the continuing deficit of cooperation between the developed democracies which until now have run the show themselves.