HEILIGENDAMM, Germany - Facing the probability that this year's G8 summit will be a failure -- mainly due to U.S. opposition to an international consensus on environmental, financial, and African cooperation issues -- the German government, host of the event, is scaling down the expectations that it helped to stir in the first place.

Only a couple of days before the summit starts at this resort on the Baltic Sea, Bernd Pfaffenbach, German deputy minister for economics, and the government's head planner of the Group of Eight summit, warned that hopes for the meet's outcomes had been too high.

In an interview, Pfaffenbach referred specifically to the international environmental consensus proposed by the German government as one of the main items on the G8 summit's agenda, aimed at fighting global warming.

"It is true that there is no common line in this issue (among G8 countries)," Pfaffenbach said. "But it is also true that the expectations were too high," he added, allegedly contrary to the efforts of the German government. "The Chancellor (Angela Merkel) did not want that this subject would receive that much attention," Pfaffenbach claimed.

But the fact is the German government put the climate change issue high on the official agenda for the summit, which government officials like Pfaffenbach himself helped to formulate. The official German presentation of the summit says, "Great importance will be attributed to the subject of energy efficiency. New impetus for global climate protection and common international efforts after 2012 (post-Kyoto Protocol) will play an important role" during the summit.

However, Germany prepared the summit without considering the stubborn opposition of the U.S. government. This is also true when t comes to German demands for more international controls over highly speculative hedge funds.

Again, the U.S. government, this time with the British government, opposed the articulation of a clear G8 strategy towards a strict code of conduct for hedge funds. The aim of regulation is to reduce systemic risks in the financial markets that arise from highly speculative investments.

The heads of government of the G8 (made up of Britain, Canada, France, Germany, Italy, Japan, Russia, and the United States) are meeting Jun. 6-8 in the German seaside resort of Heiligendamm, some 300 kilometres northwest of Berlin.

Pfaffenbach admitted that "The U.S. and the British governments, under whose jurisdictions most of the hedge funds are based, showed some readiness to discuss the subject. But the summit of Heiligendamm won't be a success in this matter."

As consequence, the joint declaration by the G8 ministers of finance, who met in Potsdam, near Berlin, on May 19, was a masterpiece of diplomatic ambiguity. "We continued our discussion on recent developments in global financial markets, including hedge funds, which, along with the emergence of advanced financial techniques and products, such as credit derivatives, have contributed significantly to the efficiency of the financial system," the joint declarations says.

"Nevertheless," it adds, "the assessment of potential systemic and operational risks associated with these activities has become more complex and challenging. Given the strong growth of the hedge fund industry and the increasing complexity of the instruments they trade, we reaffirmed the need to be vigilant."

No word appears of the "code of conduct" for hedge funds initially demanded by German finance minister Peter Steinbruck.

Success appears also barred for the G8 summit on its cooperation programmes with Africa. According to German sources, U.S. representatives rejected a proposal inviting the Organisation for Economic Cooperation and Development to propose ways of complying with renewed aid promises for Africa.

The German worries that the G8 summit would be seen as a fiasco, moved a group of close aides to Chancellor Merkel to design a new public relations strategy, aimed at channelling the public expectations of the summit towards what are considered popular issues.

In a classified public relations strategy paper, formulated by this group of German government officials on May 20, Beate Bauman, Chancellor Merkel's bureau chief, is quoted as saying: "The German public opinion expects that the summit will be a success on environmental protection. She (Bauman) fears, that the summit will be seen as a failure if no convincing results (on this matter) can be reached."

According to the paper, Chancellor Merkel wanted efforts made "to reduce during the coming weeks the expectations on environmental protection and energy efficiency."

The paper also reveals that the German government would announce just before the summit that it would immediately increase its development aid to Africa 750 million euros (some 940 million U.S. dollars) per year, starting in 2008.

This increase has been by now confirmed by several German ministers, including Pfaffenbach and the minister for international cooperation and development, Heidemarie Wieczorec Zeul. "By 2010, German aid for development will amount to 0.51 of the country's gross national product, as promised (at the G8 summit of Gleneagles, Scotland,) two years ago," Pfaffenbach said.

The deputy minister also announced that Merkel had invited the head of the World Trade Organisation, Pascal Lamy, to attend the summit of Heiligendamm, "to report on the state of affairs on the negotiations to liberalise the international trade", for products from developing countries.

"We're working towards the objective that the summit of Heiligendamm sends a clear signal to encourage further negotiations at the WTO", Pfaffenbach said. Market access in the industrialised world for agricultural products from Africa, Asia, and Latin America is seen as an essential tool in a long-term development strategy.

The German government has also announced that it will increase unilaterally its use of renewable energy resources, to cover 30 percent of the total electricity output by the year 2020. In addition, Environment Minister Sigmar Gabriel announced that Germany would reduce its emissions of greenhouse gases by 30 percent by 2020, instead of only 20 percent, as agreed with the European Union in April.

But the German government has also made clear that it would not sign a bad compromise on reducing greenhouse gases, anything that would not tackle the causes of global warming.

Pfaffenbach said, "We (the German government) won't accept an environmental compromise that does not respect that the United Nations be the framework of an international treaty starting 2012 (when the Kyoto Protocol expires), and that would try to water down scientific data on climate change."

This rejection of any such a compromise is a demand made long ago by non-governmental organisations tracking the G8.

In a joint declaration, the German federation of environmental organisations BUND, another environmental association, German Watch, and the ATTAC group, which advocates for the taxation of speculative financial transactions to finance development aid, demanded this week that the G8 answer the question, "whether they want to guarantee their privilege of continuing emitting greenhouse gases, responsible for global warming, or to show that they are ready for serious negotiations" at the UN climate talks in Bali, scheduled for December.

Copyright © 2007 IPS-Inter Press Service.