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World: Beyond The Personality Circus, G-8 Summit Faces Serious Economic Issues

  • Breffni O'Rourke

Leaders of the seven top industrialized democracies plus Russia meet in the French resort of Evian this weekend to discuss a wide range of economic and political themes. It will be the first meeting between U.S. President George Bush and some of his European partners since the sharp disagreement over the U.S.-led Iraq war. The media is thus likely to make much of the atmosphere prevailing between the various participants, but one of the real issues is how to restart the flagging economies of most of the G-8 nations.

Prague, 30 May 2003 RFE/RL) -- Leaders of the Group of Eight (G-8) industrialized countries meet this weekend on the shores of Lake Geneva for a summit which will arouse more than usual interest.

That's because it will be the first meeting between U.S. President George W. Bush, French President Jacques Chirac, and German Chancellor Gerhard Schroeder since they fell out over the U.S-led war in Iraq.

Such is the human-interest aspect of the summit that much media attention is likely to focus on the interaction between these three leaders, instead of on the packed agenda.

While relations between Bush and Schroeder remain cool, the French and the American presidents seem determined to make up. "I think it's a meeting that the President [Bush] is looking forward to. The fact of the matter is our relationship has undergone some strain. But there is much important business for the United States and France to attend to, and I think you'll see two leaders talk to each other in a spirit of alliance," White House spokesman Ari Fleischer said.

Also at the summit, of course, will be the leaders of Russia, Britain, Italy, Canada, and Japan, the other G-8 members. At the invitation of summit host France, some 24 leaders of developing countries will also be in Evian, and will take part in talks on the first day of the three-day summit (1-3 June).

The summit comes at a time when many of the G-8 nations themselves are mired in economic problems. In Europe, Germany is close to recession, as is Italy. The Netherlands is already estimated to be in recession. Japan's economy is moribund, and the United States is suffering under a huge current-account deficit.

As London-based economic analyst Katynka Barysch sees it, focusing in Evian on economic issues can help ease the political tensions between the trans-Atlantic partners. "Obviously in the areas of foreign security policy there are lots of divisions in the aftermath of Iraq," she told RFE/RL. "But in the areas of economics and finance the Americans and the Europeans clearly have very strong mutual interests because they are each other's biggest trading partners. And even more importantly, there are huge amounts of foreign investment going across the Atlantic in both directions, so they have a very strong interest in patching up their relations."

Barysch, who works for the Center for European Reform, said that there is a lot of pressure on the leaders to get the stalled Doha round of world trade talks going again. "Both sides are being lobbied by their business interests to overcome their divisions to get this Doha round going again and agree on the next big package of trade liberalization, which is one of the things which the world economy needs desperately at the moment in order to get going again," she said.

Further, there is the question of the weakening dollar, which is being forced down by the huge U.S. current-account deficit. "Another thing they will look at at Evian is whether they might, at one point in time, want to intervene in the currency markets to stabilize that rather drastic movement between the dollar and the euro that we are seeing at the moment," Barysch said.

The strength of the euro is such that it is making the export of European manufactures difficult because of their uncompetitive price, thus worsening the European economic situation.

The coming summit's agenda also reflects an emphasis on other issues directly affecting the Third World, such as combating famine and poverty in Africa, and controlling the AIDS epidemic. Bush will call on other G-8 members to match his new $15 billion program to fight AIDS in Africa and the Caribbean.

There will also be discussion of the Middle East peace process and the war on terrorism. French presidential spokeswoman Catherine Colonna says the summit is expected to approve measures to control sales of portable antiaircraft missiles. That follows an incident in Kenya in November when terrorists tried to down an Israeli jet with shoulder-fired missiles. Colonna also said the G-8 is expected to approve technical aid for developing nations to combat terrorism.

As for the Middle East, Bush will leave Evian a day earlier than originally planned to prepare for a midweek summit with Israeli and Palestinian leaders.