No Governance, No Party

July 20, 2009


Paola Subacchi

Research Director, International Economics, Chatham House

Despite the worst expectations in the weeks before the summit, the G8 gathering in L’Aquila handed over neither a significant outcome nor an embarrassing disaster. Participants seemed pleased with the Italians who were praised for their excellent job in managing the whole choreography and delivering a great party. The Italian organisers must felt relieved, especially as some commentators seemed prepared to support Italy’s expulsion from the G8 on the ground of poor organisational skills and its Prime Minister’s penchant for scandals.

The idea that Italy was risking the expulsion hit the main headlines in the first day of the summit, with no further follow-up. But it is disconcerting and interesting at the same time. It is disconcerting because of the implicit assumption that the G8 membership could be decided on the basis of how efficient a country is in organising a meeting and how effective, and credible, the leadership of the hosting leader is. But the organising country does not equate the entire G8 even if it plays an important role in shaping the summit, and determining its relevance.

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China’s Currency Challenge

July 5, 2009

Gregory Chin
Senior Fellow, CIGI

Statements from the Chinese representatives that it would be “normal” for currency issues to be discussed at the G8 Summit has set off a reaction from the established members of the Club. Japanese representatives have retorted that the currency issue is a side issue that can be discussed at ‘side meetings’ of the emerging economies, holding tight to the view that ‘only one currency is needed’ – blocking the issue from the agenda.

Regardless of whether or not the currency issue is ultimately put on the agenda at L’Aquila, the reality is that the currency challenge has become a systemic issue that is demanding the attention of the truly global powers. The “G7”, like it or not, will be meeting this year, in an atmosphere of global uncertainty, as leaders from Russia, Brazil, China, and other countries, have expressed concerns about the value and stability of the U.S. dollar, and the world economy’s dependence on the dollar as the reserve currency. What makes the currency question an issue of systemic relevancy is that Chinese authorities have undertaken a series of measures that indicate that Beijing is interested in gradually expanding the role of the Chinese renminbi (RMB) as an international currency.

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