G-20 Summit

G20 or the group of 20 is a group of countries that include 19 countries and the European Union. It was formed in 1999 with a point of view of including the major emerging economies along with the developed countries in the important discussions about the global economy as they were not a part earlier. The members of G20 are Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, United Kingdom, and United States of America

G20 Summit 2011- Cannes

The 6^th G20 summit was held in 3-4 November, 2011 in Cannes. The main aim of this meet was to discuss the issue of the Euro zone downturn which was affecting the entire global economy along with some other issues.

Agenda

·         The meltdown of the European Union and the Global economic crisis.

·        Volatility in the commodity markets and their impact on the food prices. The rising food inflation in the developing economies.

·        Tax evasion and reforms on strengthening the role of International Monetary Fund (IMF).

·        Need for inclusive growth and infrastructure development as well as job creation in the developing economies.

·        Regulation of shadow banking.

Agreements made at the Summit

·        The G20 countries agreed that there is a need for creating jobs and ensuring financial stability and inclusion in the developing economies and decided to work on it.

·        It was decided to move towards market determined exchange rate systems to avoid exchange tare misalignments and competitive devaluation of currencies.

·        They committed to support the IMF in putting forward the new Precautionary and Liquidity Line (PLL) to provide on a case by case basis increased and more flexible short-term liquidity to countries with strong policies and fundamentals facing exogenous shocks.

·        Members decided to develop the oversight and regulation of shadow banking where India stressed that the sharing of Bank’s past data would help in the investigation of earlier cases of tax evasion.

·        Italian Prime Minister Silvio Berlusconi agreed to open Italy’s accounting books to the quarterly audit of the IMF staff to ensure that Italy is indeed fulfilling its promises to European partners and that his government is both serious about and capable of tackling its burgeoning debt levels.

·        The members decided to stick with their medium-term fiscal sustainability plans and strategies for financial markets regulatory reforms to provide more stable economic growth.

However, the Group of 20 failed to reach over a consensus on giving more power to the IMF to help distressed countries as Euro zone was the major concern. There was a lack of economic cooperation seen at Cannes despite such strong promises made. The individual members were lacking effort, and collective resolution was diluted.

Whether the Group of 20 will be able to implement the decisions made, properly, and will it be successful in reviving the global economy is yet to be seen.

By Aakriti Sharma