1 Jul 2010
Paul Jay of the Real News Network argues that the agreement emerging from the Toronto G20 summit had "a little bit of something for everybody."
According to Jay, much that is contained in the G20 document is conditional with just one "hard agreement," which states, "The advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016." (The G20 Summit Declaration)
The implications of the Toronto G20 statement point to greater austerity measures for deficit economies. Advanced deficit economies such as America and many European countries are misguidedly attacking their social safety nets to acquire a 50% reduction in debt by 2013.
For example, in France there are plans to raise the retirement age from 60 to 62 years. While in Greece the social safety is under attack. Similarly, in Italy austerity measures are also being taken -- this has already resulted in a general strike of more than a million people last week. For their part, the Americans are discussing introducing value added tax (VAT), widely considered a regressive tax, which has negative consequences for the poorest in society.
There were hopes that the Toronto G20 would result in effective reforms of the financial sector, but these reforms have been totally watered down in the summit agreement. One of the key problems facing advanced economies is the fact that their financial sectors have become over bloated. But reforms to reign in the sector, which caused the global financial crisis and subsequent recession, are extremely poor.
In a pre-summit TRNN interview with Rob Johnson, director of the Roosevelt Institute of Global Finance Project, he argues, "I would say it (is) tragic to see all these luminaries mute about the prospect of financial reform."
Johnson contends that the financial sector has undue influence on the politics of the day. In America, for example, the financial sector accounted for 46% of corporate profit in 2007 and approached 40% again last year in the post-crisis recovery period, while only employing 3% of the workforce.
Meanwhile to the detriment of the planet and its people, those in control of global politics and economies perceive budget deficits to be a bigger threat to society than unemployment.
In this regard, Johnson argues, "The IMF says that they are projecting a change in the world debt-to-GDP ratio of about 35% between now and 2014. I believe over 25% of that is because of lost revenues and automatic stabilizers. It’s not because of discretionary spending on new programs. I would favour a public investment strategy to rebuild infrastructure and catalyze or attract new private sector investment, education spending on early age human capital -- and maybe we should subsidize venture capital, which helps us in transitions rather than ‘too big to fail institutions’, which are about yesterday's problems."
"Financial services beg the question, if you're taking that much of the profit -- if you're taking a US$800bn bailout, what are you doing for society?…Finance is supposed to be a servant to commerce. Commerce and economy and markets are a service to social goals. Well the servant's servant has become the master's master. Its time to re-invert that," he concludes.
Meanwhile in an op-ed written for the Toronto Globe and Mail, award winning journalist, Naomi Klein, contends that world leaders have stuck the public with the bill for the bankers' crisis.
Finally, one of the defining features of the Toronto G20 was the high level of police repression and brutality against activists. In the area surrounding the G20 venue, martial law was being practised. This gave police excessive powers while stripping ordinary citizens of their rights to freedom of speech and peaceful freedom of association. Many activists were harassed, beaten and arrested in Toronto, signifying a sea-change in the way that authorities are now dealing with public disagreement -- indicative of a very low level of tolerance for public debate and a serious threat to democratic engagement.
There are reports that police infiltrated certain activist groups and instigated violence in order to justify their use of excessive force against the protestors.