20 for a summit

The city of London will welcome the G20 summit in few days now, and it seems easier to discern the main features of the roadmap.

 

Several preparation meetings have confirmed that the main goal will be the regulation of the financial system, rolled out through a series of bills on the following subjects: new rules for hedge funds sector, trade bonuses supervision, bank’s asset control and financial norms review.

 

Caused by the American financial crisis and encouraged by Europeans, the London round will be a new confrontation theatre between two global political visions. Although the emerging countries are willing to take a real place in the negotiations, Brussels and Washington should try to impose their propositions.

 

Commentators expect that Obama’s administration is going to ask Europeans to do more in terms of reflation, while EU sees from a bad eye the North-American protectionist temptation.

 

Yet, we can see that the European views are based on the moral effect provoked by financial scandals, as much as the willing to struggle against injustice. Financial crisis or not, offshore centers are as always found guilty because of the bankruptcy of the whole financial system, and excessive speculation.

 

 

Whereas the tackles were very strong, it seems that this topic will be left at the margin of the great decisions. To avoid the Tax Haven black list, Andorra and Liechtenstein have already announced their decision to comply with OECD’s standards regarding large scaled scandals. We must recognize that the two principalities start from far in this domain, unlike Switzerland which follows international requirements and 2005 protocol.

 

EU looses here one of its main argument to avoid a discussion about some real reflation politics, as we can see over Atlantic. The steps achieved in terms of Tax agreements don’t change anything about banking secrecy, which is a fundamental principle to protect the private sphere. Not a chance to see Switzerland for example to allow automatic exchange of information for individuals who earn interest there, and to let the confusion between banking secrecy and tax haven going on.

 

The issue of the summit remains only economical, and we’ll see if the trend goes to a come back of protectionism. Fortunately, because we actually need economical and structural answers.