DIPLOMATS are useful only in fair weather. As soon as it rains they drown in every drop”. So said France’s most famous post-war leader Charles de Gaulle. So in my analysis of the G20 in Cannes, let me start by telling you the heavens were fully open from start to finish. Cannes was wetter than Borrowdale.
If the markets were looking for something from the official agenda to scare them then they may have focused on French ambitions regarding transaction taxes, capital controls and foreign exchange reform. If the same markets were looking for something to cheer them up then they might have sought some firm commitments on debt and more specifically debt reduction.
The truth is, those looking for firm action in the final G20 Communique would have had a hard time finding much to get their teeth into. Lots of promises and fine words. Unsubstantiated commitments to growth and jobs and to rebalancing economies. The leaders all grinned their way through the post-match pressers.
The falsest smile was on the face of Silvio Berlusconi though, because slap bang in the first few paragraphs of the Communique was a statement putting Italy on the naughty step. Yes, Italy was basically told “we don’t trust you to come up with what you’ve promised” . You will now show your books to the IMF and European Commission to prove you are delivering on your promises.
So well done Berlusconi, you alone managed to take the headlines at this meeting away from that pesky upstart Greece. That takes some doing and I wish you well in your umpteenth confidence vote this coming week.
To those who accuse our British leaders of being peripheral figures in Cannes, I ask only one question: “Are you seriously saying you wanted them near the centre of this non-event?” If I were Messrs Cameron and Osborne I’d be chuffed to bits. Think about it – no British money promised for the EFSF, no transaction tax looming and no focus on our own shaky economic performance. Turn up, smile, talk the talk, smile again and get home as quickly as possible.
It would be too mean to say that some progress wasn’t made on all fronts. Madame Lagarde will get more firepower for her IMF at some stage and that is a good thing. Elsewhere, systemically important banks will get more scrutiny, again surely few would disagree with that.
So as we look forward to another week of debt crises in Europe, Monsieur Sarkozy has handed the baton of G20 presidency over to Mexico. What mark would we give the French performance this past year? Why, in the best traditions of the Eurovision Song Contest it has to be “Nil Points”.
Steve Sedgwick is an anchor at CNBC