[DEBATE] : (Fwd) G20 for naught - Toussaint

[Patrick Bond]

A G20 meeting for naught

Eric Toussaint - Damien Millet

The G20 summit meeting in London from April 1st onward was loudly 
announced and publicized. Those 20 industrialized and emergent countries 
(G20) are meeting to find solutions to the crisis. But long before the 
end of the summit, it is clear that they will not rise to the challenge.

The G20 was not created in order to provide genuine solutions; it was 
hastily summoned a first time in November 2008 to salvage the powers 
that be and try and to plug the breaches in capitalism. It is therefore 
impossible for this body to opt for measures that are sufficiently 
radical to save the day.

Public opinion will be told to look in the two directions that are 
expected to focus aggravation: tax havens and the CEOs’ incomes.

Tax havens have to be abolished, that goes without saying. To achieve 
this it should be easy enough to make it illegal for companies and 
residents to have any assets in, or relationships with partners located 
in, tax havens. The EU countries that function like tax havens (Austria, 
Belgium, the UK, Luxembourg…) as well as Switzerland must do away with 
bank secrecy and put an end to their outrageous practices. Yet such is 
not at all the orientation chosen by the G20: a couple of emblematic 
cases will be cracked down on, minimal measures will be required from 
those countries, and a black list of non-cooperative territories 
eventually made public will have been carefully vetted (the City, 
Luxembourg or Austria have already been promised they will not be on it).

On the other hand CEOs’ incomes, including golden parachutes and other 
bonuses, are indeed outrageous. In time of growth the employers claimed 
that those who brought in such benefits to their companies had to be 
rewarded to prevent them from moving to another. Now that we live in a 
time of crisis and those companies have to admit to increasing losses, 
the same executives still claim similar rewards. The G20 will try to 
regulate their incomes for a limited duration. The logic of the system 
is not questioned.

Apart from tax havens and CEOs’ superbonuses, which will not be hit by 
any specific penalties anyway, the G20 countries will further bail out 
their banks. Though globally discredited and de-legitimized, the IMF 
will be put back at the hub of the political and economic game thanks to 
a new provision of funds which will have been made available by 2010.

The G20 strategy is to put a fresh coat of paint on a world which is 
collapsing. Only a strong popular mobilization will make it possible to 
lay solid foundations to build another world in which finance is at the 
service of people, and not the other way round. The 28 and 30 March 
demos were big ones: 40,000 people in London, thousands and thousands in 
Vienna, Berlin, Stuttgart, Madrid, Brasilia, Rome, etc. with the common 
motto “Let the rich pay the crisis!” The week of global action called 
for by the social movements from all over the world at the WSF at Belém 
last January thus had a gigantic echo. Those who had announced the end 
of the movement for another globalization were wrong. It has proved that 
it is able to bring large crowds together, and this is only the 
beginning. The success of the mobilizations in France on 29 January and 
19 March (three million demonstrators were in the streets) is evidence 
that the workers, the unemployed and young people all want other 
solutions to the crisis than those which consist in bailing out bankers 
and imposing restrictions on the lower classes.

As a counterpoint to the G20 summit, the president of the UN General 
Assembly, Miguel d'Escoto, has called a general meeting of Heads of 
States and Governments in June and asked the economist Joseph Stiglitz 
to chair a commission that will draft proposals to meet the global 
crisis. The suggested solutions are inadequate because too timid, but 
they will at least be discussed at the the UN general Assembly.

A new debt crisis is looming in the South, it is a consequence of the 
real estate private debt bubble bursting in the North. The recession 
that now affects the real economy of all countries in the North has led 
to prices of raw material plummeting, which considerably has reduced the 
strong currency revenues with which governments of countries of the 
South repay their external public debts. Moreover the current credit 
crunch has induced a rise in borrowing rates for countries of the South. 
The combination of these two factors has already resulted in suspensions 
in debt repayment by those governments that are most exposed to the 
crisis (starting with Ecuador). Others will follow suit within one or 
two years.

The situation is absurd: countries of the South are net creditors to the 
North, starting with the US whose external debt is over US$ 6,000 
billion (twice the total external debt of all the countries of the 
South). Central banks in countries of the South buy US Treasury bonds 
instead of setting up a democratic bank of the South to finance human 
development projects. They should leave the World Bank and the IMF, 
which are tools of domination, and develop South-South relations of 
solidarity such as those which exist between countries that are members 
of ALBA (Venezuela, Cuba, Bolivia, Nicaragua, Honduras, and Dominica). 
They ought to audit the debts they are asked to repay and put an end to 
the payment of illegitimate debts.

The G20 will see to it that the core of neoliberal logic is left 
untouched. Its principles are asserted again and again, even though they 
have blatantly failed: the G20 maintains its attachment to a global 
economy based on an open market. Its support to the god of free market 
is non-negotiable. Everything else is hocus-pocus.



Eric Toussaint, PhD in political sciences, is president of the Committee 
for the Abolition of Third World Debt – Belgium www.cadtm.org ), author 
of A diagnosis of emerging global crisis and alternatives, Mumbai, 
India, Vikas Adhyayan Kendra, 2009, 139p.; The World Bank: A Critical 
Primer, London, UK, Pluto Press, 2008

Damien Millet, a mathematician, is spokeperson for CADTM France 
(Committee for the Abolition of Third World Debt,).

Joint authors of 60 Questions 60 Answers on the Debt, the IMF and the 
World Bank, English version to be published in 2009.

Translated by Christine Pagnoulle in collaboration with Elisabeth Anne.

Best,

Eric Toussaint

international at cadtm.org

CADTM

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4000 LIEGE

Belgique

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