The G-20 Pittsburgh summit will closely look like that of London. On the eve
of the Pittsburgh summit, as in London, it will be said that the situation
is improving: indeed, the stock exchange is doing better, the industrial
production is increasing, optimism is everywhere, the taste for risk taking
is returning: for example, during the last six months, the cost of
protection against the possible bankruptcy of Bank of America, Goldman Sachs
and 14 big industrial companies has declined by two thirds.
As before London, everyone will benefit in believing it, because everyone
has electoral deadlines. This time, president Obama wades in front of the
Congress, which refuses him any reform on banking supervision as on health
and Angela Merkel is subjected to renewal two days after Pittsburgh…
As before London, the situation is actually extremely difficult. Production
remains far below what it was before the crisis. Unemployment is rising and
will increase, especially in Germany, France and Italy, where, according to
the OECD, the recovery of employment will be “much longer than that of
production” and lead to “a full-fledged social crisis”. Bank capital
remains more than ever insufficient. Derivatives are still there without any
control, constituting the bulk of the profitable activities of many banks.
Public debt continues to increase everywhere, so much that it is now, and
for very a long time, impossible for the Central Banks to increase their
interest rates, which deprives them of the power to fight against inflation,
if it starts one day, as it is probable.
As in London, 27 Heads of State (and not 20) and almost as many owners of
international institutions will meet for two days and will each speak for
half an hour. As in London, the leaders will discuss at length about a
subject presented as essential, which makes scandal easily and on which they
can persuade that they have some means, , but which in fact, has a very
remote relationship with the recession: in London, they were tax shelters,
easily denounced; in Pittsburgh, it will be the bonuses of the traders, put
in the pillory. As in London, there will be a few visible decisions about
them. And as in London, these measures will have no impact on the crisis and
will be by-passed: traders, as tax evaders, overflow with imagination…
As in London, we will make decisions, which we will not apply, on banks
equities and systemic regulation. And as in London, we will not care for the
threats of tomorrow: the fragility of banks, the return of speculative
activities, the lack of control of non-banking financial actors such as
investment funds and insurance companies.
As in London, we will take a thousand pictures, we will congratulate, we
will leave. Then national debts will continue to increase, financial
institutions will be more and more unstable, unemployment will increase. And
one day, without a doubt, in front of a new disaster, it will be necessary
to act. We shall turn then towards the Governments: exhausted, they
will not answer any more. There will be no more, a G-20, then.