• France's news in English

G20 to meet in Cannes as recession threat looms

AFP · 31 Oct 2011, 10:00

Published: 31 Oct 2011 10:00 GMT+01:00

Facebook Twitter Google+ reddit

Leaders of the world's biggest economies meet in Cannes this week as Europe tries to convince markets and US critics that its debt bail-out package is serious and urges China to fund it.

Much is at stake in the G20 summit on the French seafront. The world stands on the brink of a new global recession, and the leaders of the 20 most powerful developed and emerging economies need to agree measures to boost growth.

The host, President Nicolas Sarkozy, will arrive brandishing the eurozone's latest scheme to end its sovereign debt crisis and shore up its shaky banks, hoping to fend off criticism from Washington and the emerging powers.

The world finally rode out the aftermath of the 2008 financial crisis only to find itself faced with the prospect of the collapse of the euro, as weaker single currency members like Greece were pulled under by their debts.

Last week, led by Sarkozy and Germany's Chancellor Angela Merkel, the eurozone 17 agreed to allow Greece to write off half of its privately held debt and boosted the EU bail-out fund to protect big economies like Italy's.

"I think the result will be welcomed with relief by the whole world, which expected strong responses from the eurozone," Sarkozy said, after a dramatic all-night EU summit in Brussels cobbled together a deal.

Markets gave the package a cautious welcome, but Washington and the BRICS -- emerging giants Brazil, Russia, India, China and South Africa -- have not yet eased their pressure on Europe to put its house in order.

US President Barack Obama called the measures a "first step".

Chinese officials have signalled they will not be Europe's saviour and will seek new guarantees and concessions before they agree to invest tens of billions more in European bonds.

When France took over the rolling presidency of the G20, Sarkozy had grand plans to use the body to push through a raft of global reforms, but he will pass the baton to Mexico at the end of the summit after a tough few months.

He will hope, at least, to get his G20 partners -- who between them lead countries that represent more than 85 percent of world economic output -- to contribute ideas to a "Cannes action plan" to relaunch global growth.

Some economies -- such as Britain's and those of much of Europe -- have seen their growth fall to almost zero as they impose austerity programmes designed to reduce their public deficits.

Others, such as Asian powerhouse China, are still under fire for policies that reinforce their huge trade advantage over their struggling partners.

The United States has at least announced a job-building programme, but domestic political gridlock threatens to blunt its effects.

Story continues below…

Sarkozy had hoped his G20 term would see China accept a timetable to move towards the convertibility of its currency the yuan, which Western powers say is held artificially low to boost Chinese exporters.

But instead, Chinese President Hu Jintao will arrive on the Riviera in a position of strength, with Europe desperate for cash from Beijing and the other BRICS to shore up its complex financial stability measures.

The emerging powers would prefer to use the International Monetary Fund, where they are increasingly influential, as the vehicle to restore stability to sovereign debt markets -- an idea opposed by Washington.

France's ambition to use the G20 chair to push reform of world financial regulation will likely fall by the wayside, but Paris and Berlin will seek support for countries to impose a transaction tax.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Millionaire Riviera hotel boss kidnapped in broad daylight
The city of Nice where the millionaire was bundled into a car infront of shocked onlookers. Photo: AFP

The millionaire head of a luxury hotel in the French Riviera resort of Cannes was kidnapped in front of shocked onlookers in the middle of the day on Monday.

Where exactly in France are Calais migrants being sent?
Photo: AFP

Here's where the 8,000 migrants in Calais are heading.

The annoying questions only a half French, half British person can answer
Photo: Beery/Flickr/AFP

Being half French, half British is means you get asked a lot of questions (and some of them can be a little annoying.)

Migrants bussed out of Calais Jungle to all corners of France
All photos: AFP

Hundreds of migrants are being bussed across France on Monday ahead of the demolition of the Jungle camp.

The must-see French films of the millennium - Part One
A Prophet. Photo: YouTube Screengrab

Looking for something to watch?

The must-see French films of the millennium - Part Two
Rust and Bone. Photo: YouTube Screengrab

The newest French films you need to see before you die (or alternatively when you get some spare time).

Election Watch
Presidential hopeful reckons a pain au chocolat is 10 cents

So France happily takes the pastry out of him.

French ministry of defence officials die in plane crash
Screengrab: eddydeg/Twitter

The French Ministry of Defence officials were killed on Monday when a light aircraft went down on the island of Malta.

Revealed: The ten most stolen cars in France
A Smart car in Paris. Photo: JR_Paris/Flickr

Thieves in France are getting a taste for luxury cars, it seems.

Analysis - France migrant crisis
Migrant crisis won't end with Calais 'Jungle' closure
All Photos: AFP

The Jungle camp may be being cleared but this won't be the end of the migrant crisis in France.

The annoying questions only a half French, half Brit can answer
Sponsored Article
Last chance to vote absentee in the US elections
Forget Brangelina's chateau - here are nine others you've got to see
The must-see French films of the millennium - Part One
How life for expats in France has changed over the years
Why Toulouse is THE place to be in France right now
Video: New homage to Paris shows the 'real side' of city
The 'most dangerous' animals you can find in France
Swap London fogs for Paris frogs: France woos the Brits
Anger after presenter kisses woman's breasts on live TV
Is France finally set for a cold winter this year?
IN PICS: The story of the 'ghost Metro stations' of Paris
How to make France's 'most-loved' dish: Magret de Canard
Welcome to the flipside: 'I'm not living the dream in France'
Do the French really still eat frogs' legs?
French 'delicacies' foreigners really find hard to stomach
French are the 'world's most pessimistic' about the future
Why the French should not be gloomy about the future
This is the most useful French lesson you will ever have. How to get angry
Why is there a giant clitoris in a field in southern France?
French pastry wars: Pain au chocolat versus chocolatine
Countdown: The ten dishes the French love the most
Expats or immigrants in France: Is there a difference?
How the French reinvented dozens of English words
jobs available