Last week's G7 Conference did nothing to stimulate the world's economy -- even though the IMF says that economic stimulus is what the world needs badly. Tom Walkom writes:
The International Monetary Fund, which exists to backstop nations in financial trouble and which has never been a hotbed of radicalism, headlined its April update of the world economy: “Too slow for too long.”The IMF has been urging world leaders to do exactly the kind of things that Trudeau and Abe called for last week in Japan.
Justin Trudeau and Japan's Shinzo Abe tried to get consensus on the need for stimulus:
Italy’s Matteo Renzi was on side with Canada and Japan, as were France’s François Hollande and U.S. President Barack Obama.
But Germany’s Angela Merkel and Britain’s David Cameron insisted that debt and deficit control were more important than fiscal stimulus.The final communiqué from the two-day session said essentially that each nation would continue to do what it thought best.
The international cooperation which helped guide the world through the 2008 meltdown is disappearing -- for a number of reasons:
So what do we make of the G7? In some ways, its time has passed. It no longer represents the world’s major economies. China is conspicuously absent. Russia, briefly a member of what was then called the G8, was summarily expelled in 2014 for the sin of annexing Crimea.For a while, the hope was that the G20 (which does include China and Russia) would handle economic matters, leaving the G7 to ponder weightier questions, such as international security.But the G20 seems increasingly bogged down. Its bright lights — the so-called emerging economies, such as Brazil, Russia, India and China — have dimmed.Brazil is in political chaos. Russia has been hammered by falling oil prices. Even the Chinese economy is not as stellar as it was.Meanwhile, the G7’s attempt to focus on security has been hamstrung by the gradual re-emergence of Cold War politics. Beijing is at daggers drawn with the U.S. and Japan over who controls the South China Sea. Russia and NATO are remilitarizing the border between Eastern and Western Europe.
Austerity is the dinner guest who refuses to leave.