European impact in the multilateral system

68 - European policy in the G20 and G8

Grade: C+
Unity 2/5
Resources 3/5
Outcome 5/10
Total 10/20

EU coordination in the G20 has improved, but individual member states such as France and Germany still set their own priorities – and other powers often ignore European proposals.

While the G20 and G8 showed remarkable unity in response to the economic crisis in 2009, there were growing divisions between the US, EU member states and emerging economies in the G20 over financial policy in 2010. The EU’s internal coordination on G20 affairs has improved, although this has not easily translated into increased leverage. Although the EU did aim to play an agenda-setting role in the run-up to the Canadian G8/G20 meetings in July, proposing an EU-backed proposal for a system of bank levies to prevent future bank collapses, this failed to win support from the emerging economies.

The run-up to the second G20 leaders’ summit of the year, in Seoul in November, was overshadowed by the dispute over IMF reform (see component 69) and the American decision to expand its domestic money supply through quantitative easing (see component 39). Germany joined China in condemning the US policy prior to the summit – a reminder that the individual European members of the G20 sometimes set their own priorities rather than act as a unit. This tendency was also illustrated by President Sarkozy’s decision to discuss his priorities for the French presidencies of the G8 and G20 in 2011 as early as the summer of 2010, apparently without much prior consultation with EU partners.

The presidents of the European Council and European Commission took a step towards consolidating the EU’s presence in the G20 by agreeing on a division of labour early in the year. Proposals to increase the already sizeable European presence at G20 meetings – for example, by including the president of the eurozone – have been dropped. But, as the failure of the bank-levy proposal shows, even unified EU positions may fail to move other G20 members. Meanwhile, European influence in the G8 is a wasting asset as the smaller forum loses influence.