Let's be honest: The G20 is rolling into Toronto, but other than a touch of outrage over the cost of that fake lake, you've pretty much ignored the whole circus.
Now world leaders are gathering to discuss the fate of the global economy, and you're a tad worried about being left out of the conversation.
Bank of Montreal understands your predicament. Chief economist Sherry Cooper and her team published a quick and dirty guide to all things G20 on Thursday morning, giving clients just enough time to refresh their views on Saudi currency policy - they quietly support a strong euro - before the politicans and policy wonks roll into town.
Here's a cut-and-paste take on BMO highlights, going into the global gathering:
The G20 has identified four major themes for the Toronto summit:
1. Sustainable and balanced growth: The focus will be on sovereign risks and the timing and magnitude of fiscal restraint, and policy co-ordination.
2. Financial sector reform: A bank tax will be debated vigorously, while progress on regulatory reform, aimed at reducing excessive risk taking, will be evaluated.
3. Free trade, reduce global imbalances: China’s recent modest revaluation action will shift the focus to guarding against new protectionist measures.
4. Reform of international financial institutions: Strengthen the IMF and World Bank’s lending capacity, and enhance governance (lift emerging markets’ role).
And here is BMO's take of each country's priorities, starting with the host:
Canada: Prime Minister Harper and Finance Minister Flaherty have identified “sustainable global growth” as the top priority for the G-20. Canada also wants to avert a bank tax, and wants major nations to stabilize government debt—specifically for Europe to get its fiscal house in order.
United States: Ensure the removal of fiscal stimulus globally is not so abrupt as to cause the recovery to stall. The U.S. supports a bank tax, but it’s not a top priority at the G-20.
China: The announcement of renewed yuan flexibility was an attempt to deflect G-20 criticisms over its economic policies and global imbalances. China has a clear interest to prevent protectionism and enhance trade liberalization. It will also benefit from changes to IMF governance and has expressed its opposition to a bank tax.
Japan: Japan is against a bank tax, and will be a forceful proponent of free trade. The country also wants the IMF and the Asian Development Bank to enable it to play a bigger role in supporting the recovery. Japan will also promote fiscal consolidation.
Korea: As a heavy trading nation, priorities include guarding against protectionism. Korea may also seek IMF governance reform to increase voting powers for emerging markets. With strong growth and fiscal accounts, Korea will be seen as pulling its weight on sustainable and balanced global growth.
European Union: The EU wants to ensure European fiscal sustainability, while maintaining growth. Financial reform regulation, e.g. bank tax, and IMF reforms, are also priorities.
Germany: Germany, in concert with Britain and France, is in favour of a bank tax. Ensuring European fiscal sustainability and trade liberalization are also priorities.
France: France, along with Britain and Germany, also favours a bank tax. Ensuring European fiscal sustainability while maintaining growth will also be emphasized.
Italy: Italy will focus on European fiscal sustainability and is not yet convinced on a bank tax.
Britain: Britain, along with Germany and France, favours a bank tax and introduced one domestically this week. Ensuring European fiscal sustainability is also a priority.
Russia: Russia is interested in ensuring medium-term European fiscal sustainability while keeping the recovery intact. Maintaining strong global growth will boost energy prices as Russia is heavily reliant on energy exports (63 per cent of the total) and also dependent on European demand (50 per cent of exports go to the EU). Russia opposes a bank tax.
Brazil: IMF governance may feature in Brazil’s summit priorities. Brazil, like other developing countries, is pressing for more voting rights within the IMF. Strong growth (9 per cent year-over-year) means Brazil is doing its share for global growth. Brazil's banks are sound and weathered the financial crisis well. Brazil is against a global bank tax.
Argentina: Buenos Aires wants new measures to reform the global financial system. In the past, President Cristina Kirchner has wanted to discuss whether the U.S. dollar should continue to be the world’s reserve currency.
Mexico: Battling protectionist measures is a top priority for Mexico. President Felipe Calderon has already said that “protectionism is not the right answer”.
Australia: With an eye on its neighbours, Australia will press for more voting rights for China within the IMF. Australia opposes a bank tax, and favours fiscal consolidation.
South Africa: The sole African representative, South Africa will speak for the whole continent when it calls for an increase in development funding and easier access to international financing, as well as a call to avert protectionism.
India: Like other developing countries, India is pushing for greater representation in the IMF. India is opposed to a bank tax.
Indonesia: Indonesia earlier called for “a new global economic order” to emerge from the G-20. Jakarta is hoping that major reforms of the world’s financial system will lead to a fairer economic system for developing nations. Top of the list will be more funds for developing countries. Indonesia is vulnerable to the drying up of loans from European and American banks.
Turkey: Turkey will focus on ensuring medium-term European fiscal sustainability while keeping the recovery intact—46 per cent of exports go to the EU.
Saudi Arabia: As the only OPEC member in the G-20, Saudi Arabia wants the global recovery to stick and support oil prices. With some of its oil receipts priced in euros, they are quietly supportive of pan-European efforts to stabilize the euro.
