The Progressive


A project of Common Dreams

For Immediate Release

Taruna Godric
416-916-5202 ext 432 

Can G20 Avert the Crisis?

Leo Panitch: G20 trying to patch up the 'old world order'


the G20 summit yesterday, British Prime Minister Brown made the announcement
that a "new world order is emerging" that will allow the global society
to be more open, fair and sustainable.

However, it sounds more like a plan to try to keep the same
world order that was around in the 80s and 90s according to Leo
Panitch, Canada Research Chair in Comparative Political Economy at York University and the author of American Empire and the Political Economy of International Finance.

"It's impressive that the 19 leading
world states...and the European Union have not fallen apart during this
tremendous crisis and they've come together with an agreement around a
bunch of rhetoric, but also around some measures," said Panitch.

The rhetoric is that the countries
are in this together, which is significant considering that in the
economic struggle of the 30s the capitalist governments all turned on
each other. Since then the same class and state structures exist.

The measures being taken is a provision of $500-billion to
the International Monetary Fund since exorbitant interest rates have
stalled international trade.

"This is not
the kind of thing that's going to get us out of this problem," Panitch
said. "The central problem is that banks aren't lending. And all of the
brew ha ha in the run up to this meeting about whether there was going
to be more regulation for when the banks start lending again, 'cause
right now it's doesn't matter. It's not like they're engaged in
speculation. They aren't speculating. They aren't lending at any level
of risk. And the fiscal stimulus doesn't address that either.The
trouble with the fiscal stimulus is that unless the banks are lending
then the multiplier effect of that fiscal stimulus doesn't kick in.
There's nothing that the G20 is doing that is really addressing that
except ensuring that the bankers don't get more frightened."

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