Senior Research Fellow, International Economics, Chatham House
Ball games have always been a popular metaphor for managing global affairs. This suggests that the next decade may described as a Wimbledon epic in which the existing tennis champion and the young contender dominate the tournament for a generation.
As the US and China slug it out for the prize again and again, the semi-final losers, Europe and Japan, will have to sit and watch from the sidelines along with those not yet big enough to join the hard-hitters. When some more familial sporting activity is needed, then G20 can take to the pitch – but where does this leave G8? With NATO taking care of defence issues, what will Europe, North America and Japan aim to achieve with this additional forum? Is it simply being kept on life support for the duration of the current economic and financial crisis?
Real power broking will inevitably move with the economic muscle just as sponsorships and advertising contracts follow the tennis champs. This is why Europe’s continued slide into a yet deeper and prolonged economic trough matters – it will inevitable erode its economic power base and weaken political structures and the process of integration as well.
What is there for the G8 to dialogue about – is there a meaningful agenda? What real incentive is there to continue G8 meetings? There is little shared vision when it comes to economic policy and growth targets – clearly efforts to coordinate quickly flounder even in the midst of a crisis when it is most essential. If G8 tries to serve as a form of steering committee for G20, then it will have a limited life span. Attempts to use it as a G20 management tool will be viewed with suspicion – cheating the uninvited G20 members.
For the moment, the global economy, and especially the US, Japan and Europe, remain in deep recession and, perhaps even more pertinent for this gathering, the Western banks are still not out of intensive care. While the G8 may not agree on economic management, they share a common cause in the need to manage a recovery in their fragile banking systems, a cause that is urgent and not to be ignored. G8 should provide at least an opportunity to exchange information and views on the state of the financial system and the tools to deal with it, so that G8 governments can be prepared in case of further turbulence, possibly this time from Europe.
Finally, when the crisis really is over, G20 has matured and the real action to watch is G2, there will be no meaningful function left for G8. Its last phase should include planning an exit strategy from the exceptional measures taken during the crisis – preferably a carefully coordinated effort at the appropriate time – and then it will be time for an elegant exit for G8 itself – perhaps gently morphing into a G20 gathering seems the most obvious conclusion.
Disclaimer: This blog is solely intended to spur discussion, while the opinions expressed are those of the author(s) and do not necessarily reflect the views of CIGI, Chatham House or their respective Boards of Directors.