Turning Eight into Twenty

The G8 nations reach agreement on some new rules for financial markets. The police react to demonstrations with brutality.

In the matter of the economic summit of industrialized and important developing nations, the new formula is: make 20 out of eight. The Pittsburgh G20 summit may be said to be showing signs of unity. Word from delegation circles is that President Obama intends to announce at Friday’s summit closing ceremonies that henceforth the group of eight leading industrialized nations will change permanently to a group of 20. The newcomer nations include India, China and Brazil.

“The outcome is better than we expected,” was the word from the German delegation. European representatives expressed surprise that suggestions concerning controlling bonuses paid to executives actually came from the American delegation. Treasury Secretary Tim Geithner announced with satisfaction that there had been a strong consensus among finance ministers and leaders of the assembled nations on the need for reform and a framework for moving forward. He was referring to the agreement concerning higher bank reserve equity requirements and the closer supervision of hedge funds and derivatives. For the new regulations to become more than just words on paper, the Financial Stability Board created at the last G20 summit in London is to monitor for compliance. The forum consists of central banks and financial oversight agencies. The conclusion from delegation circles was that the pressure mounted principally by Germany and France seemed to be working well.

There was even progress made on the subject, repeatedly brought up by China, of the outdated division of power within international organizations. The International Monetary Fund (IMF) will increase voting power by five percent for those nations previously underrepresented. The number of seats in the IMF, currently 24, as well as the financial allocation for the fund, will remain unchanged for the immediate future. The word from delegation circles was that the only area where there was no progress at all was on discussions concerning climate change.

In contrast, several hundred demonstrators marched in protest through Pittsburgh demanding increased environmental protection and more equity in the global financial system. Videos later made available on the Internet documented a series of overreactions against the demonstrators perpetrated by security forces. Altogether, 19 arrests were made.