What can Brown salvage from the G20 Summit?

I am still struggling to see where this consensus the Prime Minister keeps talking about over fiscal stimuli and international agreement on future regulation is going to come from. His current mini-world tour in the run up to next week's London Summit doesn't seem to be getting him anywhere very fast. It is almost as if he is saying the same thing over and over again in an attempt to convince himself that everyone agrees with him but he is actually beginning to look very isolated.

The only clear consensus I can see among the UK, the US and the European Union is over the push for greater transparency on the part of tax havens and can easily imagine this being trumpeted as a major triumph in order to cover up the divisions elsewhere.

On regulation, it looks as if there is very little meeting of minds and, as I have said before in this blog, Europe is making the running here, although there is now some very tough talk emerging from the US too. So far, the UK hasn't put any specific proposals on the table so it is hard to see exactly where the expectations are being set for the summit.

When it comes to pumping even more public money into beleaguered economies, this message has gone down well enough in New York where the new administration has embraced this route with vigour but it is being met with a frosty reception on this side Atlantic. The main EU countries are not struck on this approach, although both France and Germany have indulged in some targeted public support, especially in the automotive sector.

It is at home where the support for this approach is collapsing. Yesterday, the Governor of the Bank of England made it clear that the central bank does not believe further extension of the public debt is sensible and, right on cue, the markets gave it a thumbs down today when they failed to fully support the gilt auction the the first time in seven years, an ominous sign that even if the government wanted to do more it simply won't be able to.

It is getting very hard to see where Gordon Brown is going to be able to take the G20 Summit.

25 Mar 2009

Topics: regulation, Gordon Brown, G20 Summit

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