Sarkozy Upstages G20 Before It Starts.
Shrewd move by the French president to recognize that the Germans are taking all the credit for wrecking Gordon Brown's soiree before it begins, and so Nicolas Sarkozy will linger in Paris with Brazilian President Lula and then arrive late for the dinner at No. 10 on Wednesday evening, April 1. By then, the headlines will feature the word "disappointment," and Sarkozy can offer his ironic, disconsolate thoughts on the missed opportunities. Perfect. From preliminary excitement, Mr. Sarkozy already asserts that he will walk out of what he has not walked in to if he does not see progress. Some hand-waving Gallic complaint about the American banks being as rotten as Caesar's corpse? Or is it credit? The French are entertainment.
Genuine Trouble.
Simon Johnson of Baseline Scenario, a former IMF official, identifies the disaster inside the failure at the G20 in the preliminary communique. The IMF wants $750 billion for its work supporting failed economies. The G2o has not yet committed to a number, but it is likely betwee $250 and $750 billion. Simon Johnson warns:
Only three interesting points are apparently still open for discussion, all about some dimension of the IMF.First, how much additional funding will the IMF get (paragraph 6)? The debate is apparently still somewhere between an additional $250bn and $750bn. This is the most interesting headline number to watch for. If it's only $250bn, that's disappointing, and if they can't give an exact predicted number (i.e., they fudge the blank currently in the communique), that's a disaster.
Simon Johnson also points to the doubts about how the IMF will support emerging markets. The significance here is that Mexico is in collapse on the American border and needs heroic IMF assistance.
The big test of the summit's IMF-centric approach will be whether the IMF can get its increased resources lent out (paragraph 7), particularly on newly generous terms "for countries with strong policies"? This will happen quickly if it happens at all, and the body language of emerging markets at the G20 - including whether Mexico, Brazil and others sign up for the new facility - should give us early indications.
April Fool's Beauty Contest
Then there is the open question as to why the G20 chose the evening of April 1 for the dinner at No. 10. Sarkozy's spectacular wife Carla Bruni (right) usually steals the show at these events, where the wives are seated in another room. But in this instance, Mrs. Obama is likely to contest the night. And then there is the movie star who, before an unfortunate incident or two with the randy P.M. Silvio Berlusconi, used to answer to the job of the First Lady of Italy, Veronica Lari. (below)
Sarkozy has already indicated that he will not run for another term. His motto, therefore, has to be "do no harm". "Arrive late and leave early" makes for an appropriate corollary.
Or maybe mass MASSIVE CORONARIES for some susceptible someones who find themselves in close proximity of all these beauties. Imagine the lavishness of this party!
To hell with the money (we have ours)!!! Embrace- moi, mon belladonna!!
Whether or not Mr. Sarkozy will run again, as Peter K. notes -- by the way, Peter, I wish you safe travel and much fulfillment during your latest "passage to India" -- Sarkozy's snarky comments about the nasty "Anglo-Saxon system" as the root of all evil is traditional French rhetoric that surely will do him no harm no matter what he decides about his own political future. By the same token, as the G-20 lurches towards stalemate or even disaster, one must admit that Sarkozy has some right on his side this time; Barack Obama and Gordon Brown make a team of Keynesian spendthrifts that inspires confidence in no one.
In addition, Sarkozy's threat to blow up the G-20 represents another long-established French ploy -- manipulating international conferences and organizations to counterbalance or mask French political and economic weakness. But even here, Sarkozy will find some sympathy at the G-20 among nations -- especially China and India -- that resent continuing US/European, and especially "Anglo-Saxon," domination of global finance. Sarkozy is more than willing to trade off a Europe-centric system of global finance for a formal international finanical regulation mechanism that will be to the advantage of la belle France, and perhaps even be headed by a French technocrat as a broadly acceptable "compromise candidate."
Therefore, President Obama's G-20 strategy should be centered on reaching out to China, not PM Brown or anyone else in Europe, and doing some tough negotiating that trades off American debt security for an increased Chinese -- and Indian -- decisionmaking role in the existing "Anglo-Saxon" global financial system that has enriched both of those nations over the last twenty years. Wouldn't China and India likely prefer such an arrangement to a new and untried system that is, at base, actually rooted in a different form of European financial finagling and hegemony?
She's not that great. I'd take Nancy Pelosi or Madeleine Allbright any day. (Not saying where I'd take them ...)