Uh-oh. Reading the FT’s Big Interview with Barack Obama (text here, audio here), it sounds as though the US president has given up on a meaningful “global grand bargain” being reached at the London Summit. Sure, he doesn’t quite say it in those words. In fact, he bandies about terms like “significant progress,” and calls for a “strong message of unity,” as politicians are wont to do. But the signs are still there, particularly when he talks about a “fiscal stimulus”:
“What I have consistently argued is that what is needed is a ‘both and approach’. We need stimulus and we need regulation. We need to deal with the problems right in front of us and we also need to make sure we’re taking steps to prevent these types of breakdowns from happening again.
With respect to the stimulus, there is going to be an accord that G20 countries will do what is necessary to promote growth and trade. I think there is a legitimate concern that, would most countries already having initiated significant stimulus packages that we need to see how they work. Obviously I admire economists. I have a bunch of them on my staff. But to start making a whole host of plans about next year, without having better information on how the current stimulus efforts are working, is something that I think is of concern.” To my eyes, Obama’s cagey “whatever action is necessary” rhetoric supports the prevailing view that Angela Merkel and her fellow refuseniks have come out on top. Rather than a hefty injection of new spending, this G20 meeting is more likely to deliver some loose commitments on financial regulation.
The fight that Brown now faces is to spin all this as positively as he can, to create the impression that he’s forged something of earth-shattering significance.