Great Power divisions persist following G20 summit

A summit of G20 finance ministers and central bankers failed to reach any concrete agreement for measures to deal with the growing international finance crisis.

The meeting held in Horsham, southern England last Friday and Saturday brought together the finance ministers and central bankers of the world's leading economies responsible for 85 percent of world economic output. The aim of the meeting was to prepare an agenda for the G20 summit of country leaders planned for April 2 in London.

The communiqué issued by the finance ministers and central bank governors was upbeat, stating, "We have taken decisive, coordinated and comprehensive action to boost demand and jobs, and are prepared to take whatever action is necessary until growth is restored. We commit to fight all forms of protectionism and maintain open trade and investment." A closer perusal of the communiqué reveals that the assembled finance heads and bankers had been unable to agree on any of the main issues.

The failure of the leading capitalist nations to arrive at any binding agreement demonstrates that divisions between the major powers—particularly the US, Europe and China—are hardening fast. It is already clear from the proceedings at the weekend that nothing remains of the "Global New Deal" proposed by Brown to Obama in Washington earlier this month.

The implications of these divisions are far-reaching. In a comment on the growing drift between America and Germany, this week's Der Spiegel declares, "The German-American brawl evokes bad memories for economists. America and the European states were also incapable of agreeing on a joint strategy in the world economic crisis in the 1930's. The result was a worldwide trade war which only accelerated the economic collapse into the Depression. That cannot be allowed to happen again—that was what the industrial nations assured at their first summit last November in Washington. Now, however, the rifts are growing between the US and continental Europe."

Der Spiegel neglects to point out in its drawing of parallels with the 1930's that the resolution of the economic conflict between Germany and its rivals, including the United States, culminated in the Second World War.

Source: World Socialist Web Site