Finance ministers and national leaders are girding themselves for the upcoming G-20 summit in London, where they will have to overcome deep policy divisions to reach global agreement on the worsening economic crisis. The United States and Britain are calling on other wealthy nations in Europe and Asia to break the deflationary cycle through increased government spending. But the European Union, led by Germany and France, so far has balked at the idea, instead stressing the priority of financial market regulation and the need for fiscal restraint. Disputes over trade restrictions, reserve currencies and control of international financial institutions, meanwhile, have revealed cleavages between the United States and Western Europe on one hand, and developing nations like Brazil, India and China on the other. Diminished expectations for a global pact abound on the eve of the April 2 meetings, even in the financial press. “The summit may agree on minutiae like tax havens (none of which will be represented) and bankers’ bonuses,” The Economist grumbled recently. “But on the important stuff, the stage is set for disappointment.”
And yet while G-20 leaders fiddle and Rome burns, the international trade union movement has laid out an ambitious set of principles for addressing the worst global downturn since the Great Depression. On March 23 a coalition of labor organizations from more than a hundred countries issued a statement calling on the G-20 to avoid settling for “half-measures” and instead move quickly to tackle the recession and “establish a new model for economic development that is economically efficient, socially just and environmentally sustainable.” Looking far beyond the internecine squabbles among the major capital powers, the union agenda takes aim at the neoliberal model that has dominated global economic policy for at least a quarter-century.
“Workers around the world, who are losing their jobs and their homes, are the innocent victims of this crisis,” reads the unions’ fourteen-page London Declaration, “a crisis precipitated by greed and incompetence in the financial sector, but which is underpinned by the policies of privatisation, liberalisation and labour market deregulation.”
“This is a historic pivot,” says John Sweeney, president of the AFL-CIO. “The first objective of the summit needs to be to get other countries to do their share in fighting the global recession. But in the longer term, we also need to be focused on the fundamental imbalances that led to the crisis, and on building a stronger, more stable economy with results that are more fairly distributed.” Sweeney is playing a leading role in an international delegation of labor leaders to the summit, which will present the London Declaration to British prime minister and G-20 chair Gordon Brown during a meeting on March 31.
Along with an internationally coordinated commitment to government spending and public employment, the London Declaration calls for taking public control of insolvent banks; establishing a new global framework for financial regulation, “with full stakeholder engagement”; reforming international institutions like the World Bank and IMF; bolstering core workers’ rights and wage standards; and extending social safety nets to cushion the ranks of the unemployed, which could grow by more than 50 million worldwide by the end of this year.