Stephen Harper is a stickler for focused, efficient meetings. So why, pray tell, does he so clearly value the international summit cycle, which to external eyes seems so disorganized and chaotic? Never more so than at this week’s G20 in Cannes, with tiny, shambolic Greece holding a loaded pistol to the temple of the global economy.
It’s a fair question. The partial answer is that Harper relishes being a global player in the company of his peers. But there’s more to it than that. Given the extreme interconnectedness of world finance and Canada’s reliance on trade, the prime minister has had to become a devout multilateralist. Intriguing, for a man who only a decade ago put his name to a letter urging a provincial premier to “build firewalls” around Alberta.
As the Greek mess shows again, there is no way, other than co-operation at the head-of-government level, to even begin to grapple with global problems affecting all. In Cannes the stakes could not be higher: If the assembled leaders fail to somehow bully Greece and other recalcitrant euro states into line, they face a catastrophic breakdown of the European system itself, with cascading effects around the world. All this, because of shoddy management of an economy worth a scant three per cent of eurozone GDP.
Harper himself alluded to this in a speech he gave last week at the Commonwealth meeting in Perth, Australia, in which he set the stage for Cannes. After citing “the very real risk, if appropriate and timely decisions are not made, of a second round of global recession,” the PM waxed uncharacteristically poetic about the famous G20 crisis session in Washington in 2008, as the global financial system faced imminent meltdown:
“They (G20 leaders) recognized that in a globalized economy, a flood engulfing one would soon swamp us all. So even though those 20-some leaders all represented sovereign states, they agreed quickly to a common, synchronized set of actions to chart the same course toward calmer waters. Ideological differences were set aside. Old enmities were not raised. Indeed, if you had arrived from another planet, you never could have guessed which nations had spent decades mired in hostility. Now, you might call that situation the Fellowship of the Lifeboat.”
Here’s what the fellowship of the lifeboat led to; immediately, an international round of stimulus spending to avert a depression; a commitment to collectively reducing deficits and debt; better regulation of banks, with Canada emerging as a model; a renewed dedication to free trade; and the beginnings of an attempt to address global trading imbalances, primarily with China.
Commitment is one thing, follow-through another. The stimulus was politically easy. The austerity portion, reiterated at the Toronto G20 last year as the Black Bloc drew our attention elsewhere, has been much less successful. Debt levels across the developed world have skyrocketed, to the point where several European governments — Greece first in line with Italy and Spain not far behind — face insolvency.
The trouble is that the eurozone shares monetary policy, by dint of the common currency and central bank, but not fiscal policy, which remains under the control of national governments. National governments just can’t resist borrowing huge piles of money to buy votes. For them it’s like catnip, or a crack habit.
In that light, Greek Prime Minister George Papandreou’s rabbit-from-a-hat move to hold a referendum on a $181-billion eurozone bailout smashed a hole in Harper’s good ship Fellowship with a hatchet. That’s because, setting aside platitudes about how the people are always right, direct democracy doesn’t lend itself to crisis management. The likelihood of Greeks choosing an externally imposed plan that brings austerity, with long-term gain but short-term pain, is slim to none. It would be little different in Canada. For evidence Google Rae Days, Ontario, early 1990s.
Hence the intense pressure brought to bear on the Greeks in Cannes. If Papandreou survives the weekend he will abandon his referendum and impose the euro-bailout on his people, whether they support it or not. The primary lever of persuasion will be the assembled leadership of the G20, twisting arms, knocking heads.
Whatever it may have been in the past, this has become a de facto global crisis council, with enormous responsibility that transcends national borders. If the G20 did not exist, we would already be well into the depression its leaders averted three years ago — and are struggling to stave off again.
Small wonder Harper wants to be there.
mdentandt@postmedia.com
There’s an old saying – dating back to the Trojan horse – “Beware of Greeks bearing gifts.” This might be the right time, and a politically correct time for the anecdote indeed. If they are bearing gifts, they can’t afford them, so beware… Let’s just worry about our own upcoming austerity measures in Ontario because we just happen to have a larger deficit than first anticipated, surprise! A month ago we were in better shape financially than anyone in the world, but now it’s time for budget cuts.
They have two choices: Tax, or cut social programs. Yea right, since taxing is so politically unpopular, I wonder what the Conservatives are up to. The last time the lingo that they are using was used, Harris made a lot of people beg for food from the churches, and the homeless shelters were overwhelmed with middle-class who became one paycheck away from homelessness. Mike Harris, in his own words said “Community is going to have to step up and charitable organizations will have to take over where the government social programs will be eliminated.” I really don’t believe that an old widow using government subsidies is having Lobster Bisk and steak very often. Perhaps they could eat cheaper tuna – Skipjack instead of Albacore, perhaps flaked instead of chunked?
Oh well, time will tell, not the truth, but will tell.