/ 9 July 2009

G8 rifts emerge as economic danger signs spied

The world’s most powerful leaders warned on Wednesday that the global economy is still in peril, at a summit marred by Russia’s renunciation of climate-change targets and splits over Iran.

The build-up to the Group of Eight (G8) gathering in L’Aquila, which was devastated by an earthquake less than 100 days ago, was also overshadowed by turmoil in China, which prompted President Hu Jintao to hurry back to Beijing.

United States President Barack Obama and about two dozen other heads of state and government were flown in a buzzing fleet of helicopters to the small Italian town for discussions focused largely on kick-starting the global economy.

They also tackled issues such as climate change, food security, and the continuing stand-off with Iran and North Korea over their nuclear programmes.

As talks started in a military barracks, it emerged that ambitious plans to halve greenhouse gas emissions by 2050 would not be endorsed by major polluters such as China and India, and there were few concrete economic measures.

They also struggled to reach an accord on condemning Tehran’s crackdown on post-election protests as Russia held out against sanctions, diplomats said.

A joint statement on Iran said the post-election violence was of “serious concern”, but G8 leaders nevertheless insisted on the importance of pursuing talks to end the nuclear stand-off with Tehran.

The statement stopped well short of earlier calls by US Secretary of State Hillary Clinton for tougher sanctions on Iran.

“We want to give negotiation every chance. If that works, then great. If that leads nowhere, then that won’t be without consequences,” France’s President Nicolas Sarkozy told reporters after the talks.

The divisions over Iran contrasted starkly with the G8’s stance on North Korea, as Pyongyang’s latest missile tests were universally condemned.

According to a copy of a joint declaration on the economy agreed at a working lunch, the G8 leaders may have detected some positive signs of recovery but do not believe the global economy is safe yet.

“While there are signs of stabilisation, including recovery in stock markets … the situation remains uncertain and significant risks remain to economic and financial stability,” said the statement.

The communiqué was vague, however, about what further steps were needed and said “exit strategies will vary depending on economic conditions and public finances”.

Shifting balance of power
Italy’s Prime Minister, Silvio Berlusconi, declared “the worst is over” and governments “will work in a concerted fashion in future”.

But Andrei Bokarev, a senior Russian Finance Ministry official, told reporters that members of the G8 club were divided and “some countries believe that it is still premature to speak about any exit strategies”.

The summit brought together leaders from the United States, Canada, Japan, Russia, Britain, France, Germany and Italy.

But in a sign of the shifting balance of power, much of the discussion will be expanded to include emerging powers India, China, Brazil and South Africa.

They pledged to rein in the growing practice of cash-rich but land-poor countries’ snapping up African farmland to ensure continuing food stocks.

It is the biggest international gathering since a landmark Group of 20 summit in April when $1-trillion was committed to the International Monetary Fund and other global bodies to help struggling economies.

Efforts to combat global warming also featured prominently on the agenda, with the G8 leaders agreeing to bear the brunt of steep global cuts in greenhouse gas emissions.

“Because this global challenge can only be met by a global response, we reiterate our willingness to share with all countries the goal of achieving at least a 50% reduction of global emission by 2050,” they added.

But the declaration was overshadowed when a broader group of major polluters, including China and India, dropped an earlier pledge to halve their pollution by 2050.

Russia then threw another spanner into the works when President Dmitry Medvedev’s top economic advisor said a G8 pledge that developed nations should reduce pollution by 80% by 2050 was “unacceptable”.

“We won’t sacrifice economic growth for the sake of emission reduction,” Arkady Dvorkovich told reporters.

Obama was one of a number of leaders taken on a tour by Berlusconi of the villages at the epicentre of the April 6 quake, which claimed 299 lives.

“Obviously our hearts were broken by the death and destruction that took place after the earthquake,” Obama said. — AFP