The Japanese have moved to hold down the value of their currency, leaving less room to criticize China for doing the same. The United States’ struggle with its economy and public debt has hobbled its authority on the world stage.
As the leaders of the Group of 20 opened their summit in this French resort Thursday, they were facing the limits of the G-20’s role as a sort of coordinating committee for the world economy. This year, the meeting of great powers has been overshadowed by outside events, jolted by surprises — Greece’s on-again, off-again referendum on an emergency bailout considered vital for the world economy — and buffeted by changing winds in small nations.
Greece’s referendum and possible exit from the euro zone dominated G-20 talks, with world leaders focused on how to prevent Europe’s problems from wrecking the international financial system and undermining the global economy.
The leaders explored possible responses, including new lending to troubled economies by the International Monetary Fund and direct loans to Europe from developing countries.
Up for discussion again was how to persuade China to export less and import more, which could help fuel economic activity in places such as the United States.
But none of the ideas represented a “silver bullet,” said an official familiar with the talks.
Unlike two years ago, when G-20 leaders agreed on a massive global stimulus program to address the recession, the discussions here promised little dramatic impact. Government coffers are too bare in many countries to pursue such options again, and leaders are divided over the best strategies.
European efforts to persuade China and other major emerging economies to help finance Europe’s bailout fund have fallen short. U.S. officials, meanwhile, have insisted that the countries sharing the euro currency have enough money to pay for their own rescue program.
“We certainly believe that Europe has the capacity to step forward and to provide the kind of resources that can work through this period of time,” said U.S. deputy national security adviser Ben Rhodes.
President Obama, who held separate meetings with French President Nicolas Sarkozy and German Chancellor Angela Merkel, pushed for Europe’s leaders to move forward as quickly as possible with the emergency plan they approved last week to address the Greek debt crisis and the continent’s spreading financial problems. Greek Prime Minister George Papandreou’s surprise announcement Monday that he would subject the bailout plan to a vote of his populace threw the rescue program into disarray, and the uncertainty did not ebb even after he reversed direction Thursday, saying he was scrapping the referendum.
“The steps needed to be taken are clear irrespective of the political personalities or situation at any given moment,” Rhodes said. “What needs to be done as relates to Greece and the stabilization of the euro zone was outlined last week.” Washington Post