Home of golf and full of five star hotels, St. Andrews is a lovely spot for a weekend shindig, so it’s no surprise that the G20 have convened there for their latest navel-gaze.
This meeting was supposed to be the preserve of finance ministers, but you can’t keep a statesman down. Gordon Brown delivered an impromptu lecture on 'the way ahead' to ministers who have, by some fluke obviously, stewarded a return to growth in their respective countries. Brown is adamant that curbing stimulus packages and inaugurating exit strategies be co-ordinated globally. He spoke of the need to protect taxpayers’ investments with what he called a ‘social contract’. He cited a financial compensation scheme to cover losses of failing investment banks, a tax on all financial transactions, and the perpetual claim that bonuses must be curtailed, as possible solutions - welcome to taxpayers, but could these suggestions, especially the tax option, work in practice or be adopted globally?
The rest of Brown’s speech veered towards his favoured clichés and beloved tractor statistics – stabilised banks, depression averted, saviour of the world (though he’s made that post more pluralistic in recent weeks) and the need to guard against rising commodity prices. The problem is that whilst the G20 pontificate about the future, the fundamental causes of financial collapse remain unresolved. The banks are not performing their essential task; credit, and thus the rest of the economy, is paralysed. A social contract between banks and the public should be confined to the bank providing credit and the public repaying loans.