Brown’s New World Order? No!

The G20 summit attracted headlines about ‘a trillion dollars to save the world’ , but the numbers concealed the underlying disagreements and were largely a conjuring trick – just another Gordon Brown budget writ large

For the first time in his troubled premiership, Gordon Brown could have walked into a newsagent on Friday 3 April to be greeted by a range of rave headlines: his G20 summit had been judged a success. ‘Brown’s New World Order’, proclaimed both the Mail and the Guardian. Even Nicolas Sarkozy called it ‘historic’. Everywhere, Brown saw his key message: ‘A trillion dollars to save the world’. No one would have guessed the figure was entirely illusory. In fact no one, from any country, has pledged any real stimulus. Not an extra penny, rouble or cent has been put on the table. But this was not a problem for a man with Brown’s conjuring skills. No world leader is better at fiscal alchemy. He dressed up old schemes as new, double-counted various guarantees, used his catch-all phrase, ‘make funding available’ – is that a loan? A donation? Some form of underwriting? – and arrived at the headline figure. It was a well-crafted chimera: a Brown budget for the world.

Yet for all the lack of hard agreements, the G20 negotiations themselves tell us plenty about the battle for world capitalism. Within the 3,000-word communiqué, we saw the tensions between fiscal conservatives and neo-Keynesians, and the steady ambition of China to use its $2 trillion piggy-bank to maximise its position in the world. It is a struggle that will play out through many other summits this year: the G8, IMF, EU and OECD, not to mention another G20 jamboree in the autumn.

As in the Blair era, Britain and America stand united. But in a mirror-image of the war summits, les Anglo-Saxons were to the left of continental Europe, calling for an extra stimulus to which the others were unwilling to agree. Angela Merkel, Germany’s Chancellor, emerged as the champion of fiscal conservatism. ‘I will never let anyone tell me we must spend more money,’ she announced. Nicolas Sarkozy said the same of France. Old Europe is almost as suspicious of American fiscal expansion as it was about American military expansion.

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