October 20, 2008
President Bush, Nicolas Sarkozy (current EU President) and EU Commission President Manuel Barroso, met at Camp David on 18 October to discuss the continued coordination of steps needed to solve the crisis in today’s global economy. They agreed to reach out to other world leaders with the idea of beginning a series of summits on addressing the challenges facing the global economy.
World leaders will be consulted about the idea of a first summit of heads of government to be held in the U.S. soon after the
U.S. elections, in order to review progress being made to address the current crisis and to seek agreement on principles of reform needed, to avoid a repetition and assure global prosperity in the future. Later summits would be designed to implement agreement on specific steps to be taken to meet those principles.
Sarkozy and other European leaders wish this meeting to include the G8+5 leaders (Canada, France, Germany, Italy, Japan, Russia, US, UK; Brazil, China, India, Mexico,
South Africa) and an Arab country.
There are serious differences between the Americans and Europeans as to how far reforms should go and also the nature of such reforms. The EU seeks a fundamental reform of the present system (a ‘Bretton Woods II’) and a worldwide supervision of the markets.
The different approaches of the French (“capitalism of the future”) and Bush (“fundamentals of democratic capitalism”) will inevitably clash. Bush recognized the need for “regulatory institutional changes” but added, “It is essential that we preserve the foundations of democratic capitalism – commitment to free markets, free enterprise, and free trade.”
In response, President Sarkozy said, “The president of the United States is right in saying that protectionism and closing one’s borders is a catastrophe…. But we cannot continue along the same lines,” he added, “because the same problems will trigger the same disasters.”
Mr. Barroso was more succinct: “We need a new global financial order.”
Europe has taken the lead in driving the movement to reform and with the forthcoming change of Administration in
Washington, The EU has a unique opportunity. Whether this will become ‘Europe’s hour’ depends on whether we are capable of maintaining ongoing leadership.