Key Development Since G20 in Mexico: A Deal Between Europe, Wall Street & The BRICs?
The focal point of the G20 leaders’ summit in Los Cabos, Mexico, June 18-19 was the eurozone sovereign debt crisis. The United States and other G20 members made sure that Europe would remain committed to “a concrete timeline for further political and fiscal integration.”
According to the CFR, there are “two key takeaways” from the meeting:
“first, the additional commitment of funds to the IMF by the large emerging markets, which indicates that they have accepted to continue a longer-term process of IMF quota reform, despite the Obama administration’s inability to get Congressional approval for the 2010 agreement before the October 2012 deadline. Secondly, it is the detailed commitment of the euro area, which “will”–rather than intend, or should–”take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks.”
The events after the G20 meeting? A lessening of coverage of the eurocrisis by mainstream news, although Spain certainly peaks its head out from behind the headlines, and a major downgrade by keystone institutions of the western financial sector reoriented the focus of the people to another aspect of the crisis. About the same time, BRIC nations pledged nearly $100 million dollars to the International Monetary Fund, thereby investing in a say at the roundtable of financial priests. Whether or not their voice will be heard remains to be seen.
Essentially, what this amounts to is a “Third World” bailout of the “First World.” To be sure, the concepts of Third and First World are obsolete, as is “$100 billion”, as the two have synthesized per the agenda for the “globalization of poverty.” Nevertheless, most likely these pledged funds will go to service western financial institutions as their profits year-to-year are increasingly dominated by welfare of the elite.
The deal built upon at G20 was a European pledge to further concentrate power among international and quasi-international financial and political institutions, in return for a lessening of media focus as well as funds from once “peripheral” nations – the BRICs – who received, in turn, more say in world policy at the International Monetary Fund and the World Bank. The United States financial system received the opportunity, in return for taking a hit in the headlines, the opportunity to short themselves and the stock market and make out just fine.
