The core purpose of the Group of Eight summits was to politically coordinate the economic policies of the world’s richest nations. During a major global slowdown, the economy should rightly have been the focus of the present L’Aquila summit. Instead, the focus was spread among climate change, North Korean missiles and the state of undress of Silvio Berlusconi’s partner. Yet the summit did produce an economic agenda whose primary message, in an echo of India’s budget, was one of caution about the prospects of recovery and a reaffirmation of fiscal pump priming. The possibility of a double-dip recession, with the second dip still to come, and a withering of any economic green shoots overwhelmed any concerns about inflation and fiscal exit strategies.
However, the general disinterest in the G-8’s economic statement does reflect how much less influence on the world economy these governments have. L’Aquila sought to come up with a new, more realistic membership formula. Like previous attempts, however, it descended into absurdity. Besides the eight industrial nations and the five-largest emerging economies, over 30 other heads of government and international organisations were present. In any case, so long as the G-8 governments remain a decision-making elite within the summit structure, it hardly matters who is outside. Which is why the G-20 summit is seen as a more important global economic platform and there is more interest in rearranging the chairs at the International Monetary Fund’s board.
The G-8 remains useful if the developed world has an agenda different from the developing world — and it wants to push the former on to the latter. Which is why climate change and the Doha trade negotiations featured so highly at L’Aquila. And, unsurprisingly, neither saw much concrete progress. The blatant inequity of trying to get emerging economies to rollback carbon emissions did help in drawing the battlelines for an increasingly ugly struggle between competing energy security demands in the run-up to the Copenhagen climate conference. More than Mr Berlusconi’s antics, the real symbol of the G-8’s decline was when Hu Jintao, head of the second largest economy and the largest carbon emitter, China, took an early flight home.