Friday, December 31, 2004


The G8 and the EU

The UK government's priorities for the G8 are published in the Economist this week.

However the UK has international obligations. The UK is a leading member of the European Union and in July it will represent the EU also as its chairman. The G8 summit takes place in July. Nevertheless, the aims being set out for the G8 seem to be those of the UK alone; didn't a similar thing happen this year when Germany was chairman of the G20?

This goes to the heart of a problem with the EU - it has no common foreign policy.

An EU website records: "Some have described the EU as an economic giant but a 'political dwarf'. This is an exaggeration. Nevertheless, it is true that the EU member states have a long way to go, in diplomatic and political terms, before they can speak with one voice on major issues like peace and stability, terrorism, the Middle East, relations with the United States and the role of the UN Security Council. The EU countries retain full national sovereignty over their armed forces. Their defence systems are firmly in the hands of the national governments, and the only ties between them are those forged within alliances such as NATO."

Sunday, December 19, 2004


Future of the G8?

2005 may see the end of the G8. This month's report by the international panel on UN reform questions whether the G8 should continue (see 'Security' below).

"The framers of the Charter of the United Nations understood that peace and security were inseparable from economic development. The institutional problem we face [is that] decision -making on international economic matters, particularly in the areas of finance and trade, has long left the United Nations and no amount of institutional reform will bring it back."

"While the annual meetings of the G8 group at head of State or Government level fulfil some of the characteristics required to give greater coherence and impetus to the necessary policies, it would be helpful to have a larger forum bringing together the heads of the major developed and developing countries. One way of moving forward may be to transform into a leader’s group the G20 group of finance ministers, which currently brings together States collectively encompassing 80 per cent of the world’s population and 90 per cent of its economic activity, with regular attendance by the International Monetary Fund, World Bank, WTO and the European Union."

Sunday, December 12, 2004



The UK set up an official website on Friday for its chairmanship of the G7/8 in 2005 ( Its priorities, for the attention of leading heads of state, are Africa, climate change, countering terrorism, non-proliferation and supporting reform in the Middle East.

But a few years ago, the UK thought public regulation of the global economy was a priority. A merger of the IMF, World Bank and the Bank for International Settlements was the way ahead. However, a respected commentator said at the time (see below) that the proposal assumes "a degree of intellectual consensus and political will that simply does not exist." In essence the global economy can't ever be regulated.

This suggests that a nation's constant quest for economic growth can't be curtailed. On this basis, it doesn't look hopeful for Africa, climate change etc.

It therefore seems that the UK should stick with its original aim - effective governance of the global economy. The European Union would surely welcome this stance: it is hurting from the present chaos in exchange rate arrangements. Incidentally, the UK is also chairman of the EU in 2005 (the second half).

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