Pity the poor finance ministers and central bank governors of the Group of 20 leading countries. They have to hike up to St Andrews in Scotland on Friday, with ghastly weather predicted, to hold a pretty pointless meeting. The weather forecast is so bad, golf will be on the agenda for only the most hardy and determined.

Rumour has it that the US wanted to cancel the meeting, even though the G20 has become the premier global economic forum, because it comes so soon after the G20 summit in Pittsburgh, the annual meetings of the International Monetary Fund, and the September G20 meeting of finance ministers in London. Nothing has really changed.

The British government will chair the meeting and a source today indicated the main aim would be to set the agenda for the G20 next year when South Korea takes the chair.

The current state of the world economy will not be on the formal agenda. Exchange rates will be discussed only at the margins of the meeting. Instead, two substantive items will be tabled, British officials said.

• The first is the nuts and bolts of the planned G20 framework for strong, sustained and balanced growth. This framework is far from nailed down. The meeting will attempt to agree what information each economy will have to submit for peer review (it’s mostly obvious stuff like economic forecasts, fiscal and monetary policy frameworks and exchange rate policies). There is no further word on what the G20 will do if the IMF, after assessing these documents, says the world is not set for strong, sustained and balanced growth. That is something for a future fight. Officials still maintain that the big change is the new political momentum behind international economic discussions.
• The second will be an attempt to agree future financial flows of money from rich to poor countries to finance efforts to mitigate climate change. The official line is that there is unlikely to be an agreement on quantities of cash, but finance ministers might make progress in determining how climate finance arrangements are organised. One British official told me that nothing of substance will be agreed.

Unless something new emerges in the rain on the East Coast of Scotland on Saturday, the meeting will be forgotten quickly. Many delegations are apparently already booking early flights home.

Tags: climate finance, G20, trade imbalances

November 4, 2009 4:21pm in G20, Global, currency, trade imbalances | Comment