Official logo of the conference
|Date||2 April 2009|
|Location||London, United Kingdom|
|Participants||G-20 + Spain, the Netherlands, NEPAD, ASEAN, the EU, the UN, the World Bank, the IMF, the WTO and the FSF|
The G-20 Leaders' Summit on Financial Markets and the World Economy was held in London on 2 April 2009 at the ExCeL Centre. It followed the first G-20 Leaders Summit on Financial Markets and the World Economy, which was held in Washington, D.C. on 14–15 November 2008. Heads of government or heads of state from the Group of Twenty Finance Ministers and Central Bank Governors (G-20), plus some regional and international organisations attended. Due to the extended membership it has been referred to as the London Summit.
Leaders of the member countries began to prepare for the London Summit months before the effective date, notably with two official meetings dedicated to that preparation, one held in Berlin, Germany, on 22 February 2009 for European leaders, and another in Horsham, Sussex, United Kingdom, on 14 March 2009 for Finance Ministers.
Leaders of the four European Union member countries of the G-20, France, Germany, Italy and the U.K. along with the two largest European non-members, Spain and the Netherlands, met in Berlin on 22 February 2009 to prepare for the London Summit and to coordinate their actions. The meeting was organized at the initiative of German Chancellor Angela Merkel.
The leaders agreed that markets, financial institutions and the wide range of financial assets they create, and hedge funds should be subject to appropriate control. In addition, they have called for effective sanctions against tax havens. They also agreed to impose sanctions against countries that intend to undermine their work. Finally, they advocated the doubling of funds available to the IMF.
Finance ministers and central bankers of the G-20 met in Horsham on 14 March 2009 to prepare for the London Summit. To restore global growth as quickly as possible, the participants decided to approve coordinated and decisive actions to stimulate demand and employment. They also pledged to fight against all forms of protectionism and to maintain trade and foreign investments.
The members also committed themselves to maintain the supply of credit by providing more liquidity and recapitalising the banking system, and to implement rapidly the stimulus plans. As for central bankers, they pledged to maintain low-rates policies as long as necessary. Finally, the leaders decided to help emerging and developing countries, through a strengthening of the IMF.
To strengthen the financial system, the participants proposed to regulate appropriately all important financial institutions, to register all hedge funds or their managers and to force them to provide appropriate information as to the risks they take. They proposed to implement regulation to prevent the systemic risks and to curb business cycles, including the limitation of the leverage effect, which amplifies cycles. They announced new measures to prevent and resolve crises, through the strengthening of the IMF and the FSF. They agreed to control credit-rating agencies and their compliance with the Code of Conduct of the International Organization of Securities Commissions; off-balance-sheet vehicles; credit-derivatives market; and non-cooperative territories.
In the weeks before the London Summit, U.K. Prime Minister Gordon Brown visited several countries on three continents to try to secure backing for his goals at the London Summit. During the trip Brown was forced to re-clarify his position on fiscal stimulus after criticism from the Governor of the Bank of England. While speaking at the European Parliament in Strasbourg, France, he was challenged by a Member of the European Parliament over his spending plans. He also visited the U.S., Brazil, Argentina and Chile. He strongly attacked protectionism saying "One of the messages that must come from next week's summit is that we will reject protectionist countries, we will monitor those countries and name and shame if necessary countries that are not following free trade practices".
In the weeks leading up to the London Summit, there had been a growing difference of opinions on the question of implementing further fiscal stimulus. The British and the American leaderships were in favour of another round of stimulus packages to try and stimulate the global economy, while the French and German leaderships remained strongly opposed to such measures because of the increased levels of debt which this would cause. On 26 March 2009 the Czech Prime Minister Mirek Topolanek strongly criticised the economic expansion policies of U.S. President Barack Obama.
G-20 leaders began gathering in London on 1 April 2009. Before leaving for the London Summit, French President Nicolas Sarkozy suggested that if a meaningful deal was not agreed France would walk out of the summit echoing the "empty chair" gesture of then-French President Charles de Gaulle in 1965. At a joint press conference in London, Brown and Obama said that suggestions of a rift were exaggerated. Sarkozy attended a separate press conference with Merkel in which both repeated calls for the summit to agree on more stringent regulation of financial markets and restated their firm opposition to further financial stimulus packages.
On the evening of 1 April the leaders attended a reception at Buckingham Palace hosted by Queen Elizabeth II. During a photograph she lightly rebuked the Italian Prime Minister Silvio Berlusconi for shouting too loudly in an effort to attract the attention of President Obama. The story was featured heavily in the Italian media, and was used by opponents to lambaste Berlusconi. After the palace reception, the leaders dined at 10 Downing Street where the food was cooked by Jamie Oliver.
Leaders invited by the U.K., Host Nation
N.B. Countries with a * are not recognised members of the G-20
The security operation, Operation Glencoe headed by Commander Bob Broadhurst, was projected to cost £7.2 million. Six police forces were used during the operation: the Metropolitan Police, the City of London Police, British Transport Police and the forces of Essex Police, Sussex Police and Bedfordshire Police. Furthermore some units from the Ministry of Defence Police have been used. It is the highest security expenditure in British history.
The summit became the focus of protests from a number of disparate groups over various long standing and topical issues. These ranged from disquiet over economic policy, anger at the banking system and bankers remuneration and bonuses, the continued war on terror and concerns over climate change. Although the majority of the protests and protestors were peaceful, instances of violence and criminal damage led to the use of kettling to contain protestors.
Ian Tomlinson, a newsagent in the City of London, died within a police cordon of the G-20 Meltdown protest near the Bank of England. Initially the City of London Police denied that any incident with the police had occurred. However video, photographic and eyewitness evidence was published in the media, and the Independent Police Complaints Commission (IPCC) confirmed that Tomlinson had been pushed back by police officers minutes before he collapsed and died of a heart attack. Further allegations that Tomlinson had been hit with a baton were supported when additional video footage became public. The IPCC then later ordered a second post mortem and an independent criminal inquiry, with the second post mortem finding that although "there is evidence of coronary atherosclerosis" it was "unlikely to have contributed to the cause of death" and that "the cause of death was abdominal haemorrhage".
The G-20 leaders – despite apparent splits between the U.K. and the U.S., who wanted a large financial stimulus, and France and Germany, who wanted stricter financial regulation – reached an agreement which, in principle, provides US$1.1 trillion to various programs designed to improve international finance, credit, trade, and overall economic stability and recovery. Programs include:
An agreement was also reached to attempt to bring wider global regulation of hedge funds and credit-rating agencies, a common approach to cleaning up bank toxic assets. The G-20 leaders also agreed to establish a financial stability forum working with the IMF to ensure wider global co-operation and to provide an early-warning system for future financial crises.
Despite calls for a green new deal from Greenpeace and others and general political hype regarding environmental concerns, none of the US$1.1 trillion stimulus package was allocated for envirnomental investment, and no other environmental agreements were made.
One of the general agreements at the London Summit is that there needs to be more government regulations over businesses, and there was a perception that the U.S. would no longer be as dominant as it has been previously. Commenting on the summit, Robert Hormats, vice chairman of Goldman Sachs International, said "The U.S. is becoming less dominant while other nations are gaining influence."