St Petersburg
Sept 2, 2013 23:33:46 GMT -5
Post by Deleted on Sept 2, 2013 23:33:46 GMT -5
Good night, once again, to you all, or if you are in Europe, Africa or the Middle East, good morning! To all those who survived August, what a month it turned out to be! Congratulations to all! 'The Financial Times' leads tomorrow with some editorial comment that the crisis mood should focus G20 heads: more co-operation needed on Syria and emerging markets.
The Group of 20 leading economies proved its mettle in 2009 when leaders united to avert the depression that threatened. Four years on, that spirit of unity is broken, and policy co-ordination is proceeding haltingly, if at all. Today’s challenges are different, but crisis – political and economic – is again in the air. The world needs the G20 leaders to rekindle their willingness to work together when they meet in St Petersburg this week.
The prospect of an imminent US bombing of Syria hangs over the summit. But it is also a diplomatic opportunity. President Barack Obama must make the most of face-to-face encounters with the leaders of Russia, China, and Saudi Arabia. These states in turn must fulfil their duty to help rebottle the genie unleashed by the gassing of Syrian citizens. The salmon pink newspaper concludes thus:
The White Nights of the summer are over in St Petersburg! Autumn or Fall has arrived, at least here in the Northern Hemisphere. I propose some toast: to the G20, the rest of the world and 'The Third'. Three cheers from kleines c and the gang (whatever you are drinking)!
The Group of 20 leading economies proved its mettle in 2009 when leaders united to avert the depression that threatened. Four years on, that spirit of unity is broken, and policy co-ordination is proceeding haltingly, if at all. Today’s challenges are different, but crisis – political and economic – is again in the air. The world needs the G20 leaders to rekindle their willingness to work together when they meet in St Petersburg this week.
The prospect of an imminent US bombing of Syria hangs over the summit. But it is also a diplomatic opportunity. President Barack Obama must make the most of face-to-face encounters with the leaders of Russia, China, and Saudi Arabia. These states in turn must fulfil their duty to help rebottle the genie unleashed by the gassing of Syrian citizens. The salmon pink newspaper concludes thus:
" ... The economic crisis is now in the emerging world, whose “decoupling” is being painfully disproved. It was riding a wave of monetary stimulus that flushed in US capital and Chinese orders for commodities. The tide is turning, confronting emerging economies with the dilemma of how to sustain growth while staunching capital outflows. The biggest actor in this drama is the Federal Reserve, which will set monetary policy as it deems best for the US. But the policy makers gathering in Russia can act to temper the turmoil.
Even talking is valuable: the more they understand each other, the smaller the risk of surprises. Predictability is the right ointment to soothe the markets’ itch. The G20 could usefully agree on basic principles by which it will handle the turmoil, such as a commitment to limit the use of capital controls. Controls can be helpful – but more to stop destabilising inflows than to trap capital wanting to flee. Outflow controls should be used only in extreme cases (such as Cyprus).
Finally, central banks could help to avoid self-fulfilling prophecies by setting up more swap lines to mitigate balance of payments crises. Most emerging markets are in better shape than in earlier decades, with substantial reserves, floating currencies and decent net foreign asset positions. If the bottom does fall out of one of the most vulnerable economies, the risk of contagion can be minimised by the G20 taking the right steps this week."
Even talking is valuable: the more they understand each other, the smaller the risk of surprises. Predictability is the right ointment to soothe the markets’ itch. The G20 could usefully agree on basic principles by which it will handle the turmoil, such as a commitment to limit the use of capital controls. Controls can be helpful – but more to stop destabilising inflows than to trap capital wanting to flee. Outflow controls should be used only in extreme cases (such as Cyprus).
Finally, central banks could help to avoid self-fulfilling prophecies by setting up more swap lines to mitigate balance of payments crises. Most emerging markets are in better shape than in earlier decades, with substantial reserves, floating currencies and decent net foreign asset positions. If the bottom does fall out of one of the most vulnerable economies, the risk of contagion can be minimised by the G20 taking the right steps this week."
The White Nights of the summer are over in St Petersburg! Autumn or Fall has arrived, at least here in the Northern Hemisphere. I propose some toast: to the G20, the rest of the world and 'The Third'. Three cheers from kleines c and the gang (whatever you are drinking)!