Miliband right to call for emergency G20
In his Financial Times article (£) yesterday, Labour Leader Ed Miliband MP has echoed the demand made a month ago by the global trade union movement for an emergency G20 summit. The economic case for G20 priorities to shift up a gear to create jobs and re-stimulate growth in the short term is overwhelming, especially given that Europe and North America are below what Martin Wolf called (£) “escape velocity” earlier in the week.
Countries are now slipping into a low growth debt trap that will only freak bond-markets more. As the global union family said in August:
“Markets have responded predictably like panicking sheep to the vacuum of leadership from the G20.The only acceptable way to exit from this crisis is to stimulate growth and job creation yet the governments are talking of further austerity. The private sector will never generate jobs as long as companies see no reason to anticipate higher demand for their products. Decisive pro-employment measures are urgently needed.”
The tragedy is that despite the efforts of the French Presidency to raise ambition, the sights of the G20’s collective leadership are currently set so low they are pointing into the ground. Political paralysis appears to rule out bold short term macro action by Angela Merkel’s current government in Germany and by the US Administration given the US House of Representatives’ belief in “ante-diluvian economics”.
But there are alternatives. Chris Barret, the newly appointed Australian Ambassador to the OECD has written Australia and the Great Recession, which sets out the successful measures taken to stimulate one G20 economy in 2008-2009 whilst maintaining market confidence.
We need a comparable scaled-up response at the G20 now, and Ed Miliband is right to call for an emergency G20 summit as the starting point.