G20: Stability should remain the prime goal

The growing trend towards isolationism – not only among the general public but also in government circles in many countries – raises the question of the future sustainability of the G20 community of nations. The annual summit meetings are intended as forums for international cooperation on financial and economic issues. The original intention of preventing future financial and/or economic crises is to be implemented by the goal of ensuring stability. Given not only the barely sustainable fiscal policies of most countries, we see a great danger that the focus could be placed on the harmonisation of subordinate themes, for which consent would be easier to achieve, while the key priority is pushed more and more into the background of attention. To avoid any misunderstandings: All three pillars of the German presidency’s agenda are important. But should the stability of the global economy become jeopardised once again in the years ahead in the face of a crisis, all other priorities are likely to become considerably less important, at least temporarily. This makes the priority of „ensuring stability“ the most important goal which should only then be followed by the goals of „improving sustainability“ and „assuming responsibility“.

While the G20 community cannot do any more than define directives, the observance of which is carried out on a purely voluntary basis, the possibility still exists however within this voluntary commitment of challenging the member states to implement them. In addition to the doubts regarding the shared values, a further point of criticism is that the agreements of the G20 summits are far too vague. Yet given the heterogeneity of the countries, even the attainment of these agreements should in our opinion be viewed as a success. These directives ultimately stand for the shared fundamental values.

Back to the core priority of ensuring stability. The balance of economic development of the member states since the foundation of the G20 forum has been disappointingly weak: Despite the sizeable expansion in public debt, no less than three quarters of the countries have only managed to generate subdued growth in the past 17 years. The fact that last year nearly all countries spent more money than they received is a great source of concern, and 2016 was not even a particularly negative year in this context. As average of the last five years, Germany and South Korea were the only countries not to report a negative budget balance. This raises doubts over the sustainability of the G20 countries‘ fiscal policies. For precisely this reason the regular meetings are so crucial for exposing and also repeatedly addressing negative developments. The voluntariness is not so much a problem, but the failure of certain countries to attend would be.

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