By: Dr. Mike Campbell
The finance ministers of the Group of 20 leading industrial nations (G20) will be meeting in Busan, South Korea at the weekend (tending to suggest that nobody really believes a conflagration of the relationship between the two Koreas is imminent; despite the sinking of a South Korean warship recently). In preliminary remarks, the chairman of the presidential committee for the G20, Sakong Il, said; "regarding the current crisis, the G20 is very vigilant on developments and supports the initiatives made by the EU and the IMF to remedy the problem." He was referring to the Eurozone emergency package of €750 billion that was put together to assist members that found themselves in difficulties; thereby supporting the value of the common currency (or so they hoped).
The new UK Chancellor, George Osborne, who will be attending his first G20 meeting, recently pointed out that Eurozone countries, particularly in southern Europe needed to reduce their budget deficits and demonstrate that they can live within their means. Such a keen insight will clearly be valued by his peers. Perhaps Mr Osborne will shed some light on this by explaining how the new UK government will be dealing with the same problems at home.
The G20 finance ministers will be discussing the thorny subjects of common international standards across the world’s financial markets and the idea of a global bank tax which has been floated by the EU recently. The Europeans propose to raise the tax to pay for any future financial crisis requiring a banking sector bail-out (rather than using public money). Developing nations together with Canada and Australia are opposed to this concept, but the Americans have endorsed it, so it will be interesting to see what proposals emerge from the meeting.