Timely summit but no decisions. No earth-shattering decision will come out of the world summit on the financial crisis this Saturday in Washington. Excessively high expectations can only lead to disappointment or accusations of ineffectiveness on the part of world leaders. The aim is to demonstrate a common desire to react, with the emerging nations and representatives of the least developed countries finally being invited alongside the industrial countries which dominate international financial bodies. A signal, a few expressions of willingness and a decision to meet again: that is what it is reasonable to expect.
Some observers wonder if the timing is right, since the United States will not be represented by its new president and his administration, but by a president who no longer has any real decision-making powers. I do not think there is any justification in this comment, and I believe that now is the appropriate time for the meeting. To wait for Mr Obama would mean delaying things for several months, until he can take up his post, appoint his advisers and ministers, and define the US position. It is right that at least a joint message is sent out and that the feeling of urgency is reaffirmed.
EU progress. The modest forecasts on the possible immediate outcome do not, then, mean that the meeting is a useless gathering or that it cannot have any significant effects for the future. What will be the role of the EU, which, in fact, took the initiative? I do not share the scepticism that seems to be prevailing in some Community circles. The EU is, indeed, still far from a coherent, comprehensive strategy on the indispensible new financial governance. But it is working on it seriously and some progress can already be seen. Beyond the technical content of the texts, what is vital, I believe, is dual development on the principles: it is now accepted in the EU that financial markets must comply with the standards set out and be subject to rigorous supervision; it is generally accepted that these standards should be binding and not self-regulated guidelines.
It is true that the preparatory document for the Washington summit, approved by the European Council, sets out principles and tendencies more than actual operational measures. In the meantime, the Commission is speedily presenting draft rules, some of which (for example, the European scheme for credit rating agencies) have long been in preparation but have been met with reservations, which now theoretically have been swept away. Some member states continue to be wary of the growth of what they see as excessive regulation, but the European Council has nonetheless defined a concerted position (fully reported in our newsletter No 9778) after watering down some parts of the Presidency's proposal, summarised in our newsletter No 9777. The changes are relatively minor.
There are four principles and five approaches covering the main ideas that were fully debated at various levels and within the European Council itself in the previous weeks. I would refer readers to the above mentioned newsletters, which do not hide the reservations and a certain degree of scepticism (including from Mr Juncker) on the expected outcome. Some points are still hotly debated, for example, the role of the IMF in the reform of the international financial system.
From time to time, heads of government gave the impression of being more concerned about their being involved in the Washington summit. Spain will be there, France having given up its “national” seat since it already has a “European” seat (Presidency). There will be a lot of Europeans present (too many, according to some countries on other continents), but, barring any last-minute changes, neither the president of the Eurogroup nor the president of the European Central Bank have been invited. One may wonder about the logic in deciding those taking part from Europe, but, on the financial crisis, Europe will have the opportunity to put its position across.
The missing chapter. What is still missing, however, is a common position in the face of the economic crisis. The European Council has not yet discussed this (it will do so in December) and it would appear to be virtually impossible to prepare uniform policies since situations are not uniform. Some member states have budgetary wriggle room, others do not, because they failed to sufficiently reduce their deficits when there was the opportunity. The EU does not have the “economic government” nor the financial resources to act as one. The countries which have not opted for the euro are regretting their decision, but it is a little late. The EU can only act with the instruments it has at its disposal; each is responsible for yesterday's decisions.
(F.R./transl.rt)