On Thursday last week the heads of state and government of the 20 major industrial nations met in London to reach an agreement on how to tackle the financial and economic crisis on a global scale. It was their second meeting following the one taking place in Washington in November last year.
The expectations prior to the London meeting were huge. A meeting without concrete results was therefore difficult to imagine. Nevertheless, the pressure weighed heavily on the heads of state and government and their finance ministers; after all, a wide range of very different opinions about the target of the summit had come together.

Whilst both the British and the Americans tried to urge the European Union prior to the summit to take even more ambitious economic recovery measures, Germany and France agreed that the first priority should be to regulate the out-of-control financial markets - a target, which in the global financial centres of New York and London has been naturally met with scepticism. One has to bear in mind that the Anglo-Saxon financial lobbyists had successfully braced themselves for decades against rules governing their industry; an undertaking, which had been supported by politicians of all colours. Hence, it could not be taken for granted that a common solution would be reached in London. A failure of the summit, however, would have resulted - given the already critical situation of the global economy - in massive consequences.

At first glance, the continental Europeans have probably succeeded in their request for binding regulations of the financial industry. Hence, the final communiqué and an attached Declaration on Strengthening the Financial System contain relatively concrete proposals on improving the international regulatory structure, as well as on setting up a new “Financial Stability Board”, which should in future - in closer cooperation with the International Monetary Fund - prevent potential crises by means of an early warning system. In addition, regulatory bodies and regulations should be extended to all major global financial institutions; hence also to hedge funds - an important demand also made by the AK. According to the conclusions of the G20, the era of the bank secret also appears to be over. Further issues include more sustainable remuneration systems for managers, capital requirements rules for banks and the regulation of rating agencies. The role of the International Monetary Fund will also be strengthened and the funds of the Fund for supporting distressed states - also in Central and Eastern Europe - will be tripled. At the same time it is the intention to reform the voting structures for the IMF.

The request of the British and Americans for additional economic stimuli was as much ignored in the final communiqué as was the continuation of Global Trade Talks within the scope of the Doha round, which had been requested by some.

All in all one can assume that the summit has laid down some welcome principles within the scope of its possibilities. It now remains to be seen, how these principles will be implemented and how they will be turned into concrete laws by the individual states and in particular by the European Union. This will after all be the standard against which the labour representatives will measure the results of this summit. Ultimately, it is of utmost importance to do all one can do to prevent the unrestrained finance capitalism from destroying our societies.

Further information:

Final communiqué G20 London

Declaration on International Financial Institutions

Declaration on Strengthening the Financial System

Working Papers of G20 working groups