G20

The Group of Twenty Finance Ministers and Central Bank Governors, or G20, draws its members from 19 of the 25 largest national economies, plus one member representing the European Union as a whole. G20 is used to refer either to that specific group (which has no support staff or institution) or to the member-nations collectively.

The name is a little confusing. The 19 countries represented individually are not necessarily the top 19 economies in any given year, and there are additional members beyond that 19+1: the CEOs of the International Monetary Fund, the World Bank, the International Monetary and Finance Committee, the Development Committee of the International Monetary Fund and World Bank, and the European Central Bank. G20 has been a convenient shorthand emphasizing the number of member-states (plus the European Union), and succeeding the G33 and G22 in 1999.

The countries currently represented in the G20 are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, [Page 797]Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States. When the European Union is included with these 19, some 90 percent of the world's gross national product is accounted for, and two-thirds of the population. At annual meetings, the G20 representatives collectively discuss and negotiate international matters of finance and economics.

The economic crisis of 2007–08 brought together these heads of state, along with representatives from the International Monetary Fund and World Bank, at the Summit on Financial Markets and the World Economy in Washington, D.C., on November 15, 2008.

2008 Summit

In a rare move, the November 2008 meeting was held between heads of state rather than simply the finance ministers, a change suggested by European Union President Nicolas Sarkozy and British Prime Minister Gordon Brown. The work of the 2008 summit, which took place in Washington, D.C., will be continued at the April 2009 summit in London, with the aim of reforming the global finance sector and all international financial institutions (including but not limited to the World Bank and the International Monetary Fund).

The 2007–08 economic crisis precipitated the involvement of heads of state at the 2008 summit. Because of the broad scope and the depth of the problems addressed, the financial media has begun calling the summit Bretton Woods II, though the test of time has yet to be passed; to be as sweeping as Bretton Woods, a conference needs to lead to successful implementation, not just discussion. That said, the spirit of the Mount Washington Hotel was certainly present in the affirmation of free market policies and the prevailing spirit of shoring up those policies in the face of calamity, not abandoning them.

Each country's experience of and reaction to the crisis was reviewed and addressed, and common principles were outlined for financial market reform. Sarkozy, though, argued that the “Anglo-Saxon” approach to the market had failed, that United States-United Kingdom capitalism had proven too free, too unregulated, and this in the end had led to disasters like the subprime mortgage crisis. German Chancellor Angela Merkel concurred that the international financial system had to be rethought from the ground up, and representatives of the European Union emphasized the importance of global standards of regulation and financial crisis response. Manmohan Singh, the Prime Minister of India, was vocal in cautioning against the temptations of [Page 798]protectionism, whereby every country would try to protect its own interests at the expense of the global community.

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