The Summit of G20 ended in Saint Petersburg. G20 includes 19 countries and the European Union, the annual meeting of world’s leaders in Konstantinovsky Palace brought together leaders of 26 countries and heads of international organizations.
Presidents and prime ministers of the world’s largest economies, accounting for two-thirds of the world’s population and 90 percent of global GDP, have tried to develop a common policy on economic growth, trade, transparency of the banking system, and the fight against tax evasion. The head of the Chief of the Presidential Experts’ Directorate Ksenia Yudaeva believes that the work in these areas has been very effective.
Developed countries pledged to adhere to the principle of fiscal consolidation, in other words, the reduction of budget deficits and debt load, the developing countries promised to eliminate the distortion of balance of payments. The struggle against unemployment will be facilitated by providing assistance of entrepreneurship, increasing the level of education, and adjustment of migration policy.
The US economy is, in fact, on the rise now, the economies of the European Union countries come out of recession. Accordingly, the financial regulators begin to abandon the so-called quantitative easing (QE). It is determined by very low interest rates of the central banks of the European countries and the US Federal Reserve. This, in turn, has led to a flood of cheap dollars and euros, which largely flowed into the economies of the developing countries. Now this flow might grow shallow. In this regard, the leaders of the BRICS countries have expressed concern about the “unintended” consequences of folding of the QE program by the central banks of the developed countries. President of the United States Barack Obama in response to this assured that the closing of these programs will take place “gradually and reasonably.”
Mutual restrictions in foreign trade were also discussed at the Summit.
Leaders of G20 reaffirmed their intention to abstain from them until at least 2016. However, since 2008, when they first promised not to interfere with the freedom of trade, according to the European Commission, about 700 restrictive measures have been introduced.
The unity of the Summit participants was manifested in the discussion of the issue of combating tax avoidance. G20 approved a plan that involves a transition to automatic disclosure of the taxpayer information before the end of 2015. The measure is intended to supplement revenues to the budgets of the countries where companies generate revenue, although, according to experts, practical effect from the approved initiative won’t be seen any time soon. The final communique also includes a block on financial regulation of the “shadow banking,” developed by the Financial Stability Board (FSB). FSB uses the term shady financing meaning mechanisms of credit activity which is held not under direct bank supervision. First of all, these include operations, where purchase or sale of real assets is not intended, but which are widely used as an alternative to the exchange trading. The volume of transactions of the “shadow banking” is estimated at 60 trillion dollars a year, which can be compared to the size of the global GDP.
One of the disputed issues for which the summit participants have not yet been able to reach an agreement is the reform of IMF quotas. Herman Van Rompuy, President of the European Union, said in this regard: “We have an obligation to complete a review of quotas by January 1, 2014 and the parties are aware that the EU always fulfills its commitments in this area.” In order for the reform to enter into force, it must be ratified by the parliaments of the countries, including the US Congress, where the consideration of the issue has been taken a long time. Finalization of the reserve fund and the Development Bank of the BRICS countries has been also postponed until the next meeting of the BRICS countries. The completion of the negotiations is expected at the next meeting of the leaders of five countries in Brazil.
Although, the summit participants managed to reach acceptable solutions on economic and financial issues, yet everyone was expecting more the decisions on Syria. Nothing sensational happened here. Vladimir Putin and Barack Obama spoke for about 30 minutes while all the other participants waited for them. Later the Russian president said at a press conference: “We both remained of the same mind, but we hear each other.” There Putin also said that in the event of an attack, Russia will provide “economic and humanitarian” assistance to Syria. Obviously, the ships of the Russian Navy have been sent to the Eastern part of the Mediterranean Sea for this purpose.
The US president, in his turn, spoke with representatives of Russian NGOs. He assured that the Russian Law on NGOs will be strictly criticized “at the highest level.” For this or any other reason, Putin acknowledged that the law requires clarification. It turned out to be too repressive.
However, Washington is not able to have a real impact on Moscow to make it ease their attitude towards human rights activists. The inter-state relations are not on the same level as they used to be. The meeting was rather aimed at the American home audience. Obama now has many issues there and he has to yet agree with the senators and congressmen on Syria. It’s not that the lawmakers protect Assad that much, but they can still bargain something from the administration.
The change of Germany’s position of the Syrian issue became a rather unpleasant surprise for Moscow. Through the summit it has changed from somewhat evasive to very specific. Berlin supports attacks on Syria, but only diplomatically and by providing information. On the eve of the parliamentary elections it was a rather bold move for Angela Merkel because in general German public opinion opposes the campaign. Obviously, Bundeskanzlerin is certain of her benefit, which is confirmed by sociological surveys. German economy is in a better position than that of other EU countries. Moreover, the other members of the EU are gradually emerging from the crisis, even troubled Spain, Italy, and Greece.
In general, the results of the summit can be considered, in a sense, Obama’s victory. He managed to secure diplomatic support of major EU member states, and France is ready to participate in the campaign against Assad directly.
Vladimir Putin had nothing left to do but to demonstrate the most cordial relations with China. On the eve of the summit he met with Chinese President Xi Jinping. Both leaders have shown close interaction to the public. Chinese guest, referring to the role of Russia in conducting the summit, said that “it also demonstrates the growing role in the world, and also the position of Russia as a great power. I sincerely congratulate you on this and would like to wish success to the summit.” However, China has no intention of changing the price for gas supplied by Russia. Moreover, they signed an agreement with Turkmenistan for supplying additional volumes of natural gas.
That’s all that Putin has managed to achieve, or rather failed to achieve.
