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Italy revamps G8 as UK makes G20 financial crisis focus

  Italy, seeing its presidency of the G8 become a sideshow as Britain makes the G20 the focus for fixing the global financial crisis, hopes to make its mark by changing the G8’s image as a club for rich Western nations.

 

The financial crisis has elevated the G20 to a forum of leaders rather than just economy officials and Gordon Brown’s G20 summit in April in London promises to steal the thunder from Silvio Berlusconi’s Sardinian Group of Eight summit in July.

The remit of the G8 -- the United States, Japan, Germany, Britain, France, Italy, Canada and Russia -- is to tackle global challenges from the economy to the environment. But it is viewed increasingly as an exclusive and unrepresentative forum.

“Ten years ago the G7 represented 80% of world GDP, was united around one currency, the dollar, and embodied the predominant democratic values,” Italian Economy Minister Giulio Tremonti told French newspaper Les Echos this week. “Now the G8 equals only half of world GDP and is no longer representative of the world in which we live,” he said.

Furthermore the G20 -- which until now gathered finance and monetary officials from the 19 top economies and European Union -- has the arguably more urgent task of reviving global growth and reforming the financial sector and oversight bodies.

In the heat of financial crisis, the G20 called a summit last November in Washington and a second this April in London. More are on the cards as global recession and banks’ toxic assets mean the problem is unlikely to disappear soon.

“In the latest crisis the G20 has taken the lead because the United States sees it as a better forum for taking decisions,” said former Italian premier Massimo D’Alema. “The world has changed and you cannot run it with outdated instruments.”

PRESIDENTIAL SEAL

British Prime Minister Brown hopes the London summit, which will mark U.S. President-elect Barack Obama’s first trip to Europe, will burnish his credentials as a world statesman.

Kudos for his handling of the financial crisis has given Brown a new lease of life, after doubts that he would stay in his job. But, still behind in polls with an election due within 18 months, Brown needs the G20 presidency to raise his standing versus domestic rivals. But Berlusconi, who at 72 touts himself as being the dean of Western leaders, is not easily upstaged.

He has portrayed the G20 as too unwieldy to take decisions, calling it “just a round-table with each leader almost always reading a pre-prepared speech.” Instead, he promotes the idea of expanding the G8 to include major developing-world powers.

The G8 began as the G6 in the oil crisis of the 1970s and has grown at a snail’s pace to add Canada then Russia. It now routinely meets the G5 (China, India, Brazil, South Africa and Mexico) and others like Australia, Indonesia and South Korea.

Foreign Minister Franco Frattini sees Italy’s presidency expanding the G8 “in a flexible manner” to give the emerging powers more clout, creating a “new global governance.”

G8 diplomats say there is broad support for giving emerging economic powers like the G5 “more substantive” input, but there is not consensus on Berlusconi’s suggestions that the G8 could become a G13 or G14, depending on which countries are invited.

But Italy’s G8 presidency can rest assured that Brown’s G20 agenda is focused on the financial crisis and not straying off into issues like climate change, leaving Rome scope to make its mark and delete the memory of its last G8 summit in Genoa in 2001, remembered for violent protests and police brutality. (Reuters)