As the G20 leaders jetted away from Pittsburgh, the Canadians were busy preparing to host the next G8 summit in Huntsville, Ontario next June. It must be wondered why they are bothering. The small club of nations that made up the G7 then, when Canada, France, Germany, Italy, Japan, the UK and US were joined by Russia, the G8, has become irrelevant.
The latest G20 gathering re-emphasized the reality that the world economic order is changing. The G20 includes China, India and Brazil as well as Saudi Arabia and Turkey. Collectively, it represents 80 percent of world trade, two thirds of global population and 85 percent of its Gross National Product.
It matters not that the G8 has latterly included Brazil, China, India, Mexico and South Africa in its deliberations. The world has moved on and the G20 is the body that just about represents the new realities of economic power. The caveat stems from the fact that four European powers still claim independent places at the top table. Though Germany is still the world’s second biggest exporter, the time must be fast approaching when people will ask why Italy and to a lesser extent France and the UK each deserves a separate voice in the G20. Should not these European countries now be thinking seriously of allowing the European Union to represent them and all other member states? If they believe that the EU really counts, then on economic matters, Brussels should be doing the talking. Perhaps on geopolitical matters London and Paris, as nuclear-armed powers could have individual input but should they really make any other contribution outside of the ambit of the EU?
A similar lack of proportion has long existed with the International Monetary Fund (IMF) where small countries like the Netherlands and Switzerland have exercised disproportionate influence. In Pittsburgh, the G20 agreed to shift at least five percent of the IMF board’s voting power toward the new economic powerhouses, not least China. Even such a change would mean that Beijing’s clout is not properly reflected but it is an important start. The structural voting changes need to be put in hand quickly. Meanwhile, IMF board members such as the UK and France are going to have to do some profound rethinking to understand and try to learn to work within their diminished status in world financial affairs. History may show that Tony Blair was the last British prime minister who could stride the world stage pretending at all convincingly that he had the power to influence international events.
Indeed it may be that getting used to their diminished status will prove very hard for European countries. The UK in particular has always been schizophrenic about its EU membership, by turns plowing its own independent international course and then seeking to place itself in a position of leadership within Europe. The expansion of the EU has, however, diluted UK power and influence, just as it has those of founder states France and Germany. The Old World has some tough readjustments to make in its opinion of itself.
