The run up to Copenhagen has begun and by all accounts it was a little more fiery than expected. I’m not referring to the Climate Camp in London, whose location was kept so secret, nor am I referring to Sen. Chuck Grassley’s remarkable comments that there are an increasing number of scientists who have doubts about Climate Change…really? This sounds a little like Sen Inhofe’s infamous list, many of whom were horrified to learn they were including on his list ( yes, he basically made it up). All of these are mere broadsides in the contemporary Climate Change debate.  The fire in this debate, which we’ve only seen glimmers on touches on the elephant in the room for environmentalists and even governments, Population control. India’s Environmental Minister Jairam Ramesh issued a response to efforts by the US to bring India’s population into the debate:

Speaking at a conference in the Indian capital, organised by Delhi’s Centre for Science and Environment, Jairam Ramesh said there was a “move in western countries to bring population into climate change [negotiations]. Influential American think-tanks are asking why should we reward profligate reproductive behaviour? Why should we reward India which is adding 14 million people every year?”

For many environmentalists, population control is the issue not spoken of. Many are reluctant enough to talk about curbing our “excessive lifestyles”, reducing the number of cars, the size of our homes, waste and all the rest of it makes Environmentalists seem draconian enough and a ideology of gloom without adding the terrifying illiberal issue of population control to the mix. Yet for many, it remains the elephant in the room. Recently some scientists in environmental corners have whispered it out, what is the best thing I can do to to go green? hybrid car? recycling? Errr no, don’t procreate so much.

The maths is quite simple, if you stopped flying and etc etc you could probably reduce your average footprint from say a ball park of 25 down to 15, a big reduction to be sure but over your lifetime that would ( very simplistically) only take  800 tons difference. Here is what a child adds on average:

Under current conditions in the United States, for instance, each child ultimately adds about 9,441 metric tons of carbon dioxide to the carbon legacy of an average parent – about 5.7 times the lifetime emissions for which, on average, a person is responsible.

But population control goes beyond Climate Change, in fact to some extent it dwarfs Climate Change as a problem. The world’s population is estimated to peak  around 2050, with  at over 9 billion people.  Over that period standards of living will rise for hundreds of millions of people which, without huge breakthroughs in food production and resource recycling will result in incredible strain on a planet already unable to sustain the current population. The new people rightly will expect higher standards of living than their forebears and governments will face acute problems as rising demands meets dwindling supply. Climate Change compounds the issue, reducing the earth;s resource capacity most critically in areas of food production and more gravely reducing it in the regions of the world with the fastest growing populations.

Africa and the Middle East, have among the fastest growing population and are also among the most water-poor areas in the world, with the former in historically dire straits its problems will almost certainly be gravely compounded lacking even the basic means  agricultural production.

The issue, is a uniquely human one,  all other animal species grow to the extent their environment can sustain them, reaching a natural equilibrium of sorts. Humans, differ and have expanded exponentially over their history. This century may prove more testing than others with Climate Change and economic growth heading towards a degree of inevitable conflict. You’ve already seen this problem, water resources in Sudan, oil wars in the Middle East, these problems aren’t solely due to population but population can create almost insurmountable structural pressure on politics to match demand.

But unlike other Climate Change problems which are about financing , economic growth, technology transfer and trade terms, population control hits home directly.  How many children will you or someone else be allowed? It’s a distinctly moral question, the biological essence of humanity is put into question and one of surely our most basic rights could be called into question. Deeper than that is that, it has more underlying undertones of power politics. Wealthy and ageing western populations trying to curb the fertility of China, India, Africa and the Middle East, touches on raw nerves of the balance of global power.

This isn’t the first time the issue has been raised. China, the only country to have enacted an all-encompassing population policy in its infamous “one child policy” has in the past noted that it has done more than many countries in the effort to control Climate Change through its one child policy,  which it estimates have kept several hundred million from existence and thus relieved enormous future amounts of strain from the world.

Going into Copenhagen population control is highly unlikely to feature, however its emergence into International dialogue has begun already and soon this taboo subject may well become centre stage, although I suspect a third-rail at first.

photo credit: Gernot Poetsch

Not too much closer union

In a wide-ranging and fascinating judgement, the highly activist German Constitutional Court has ruled that the Treaty of Lisbon is compatible with its Basic Law. There are, however, certain provisos that significantly affect the force of some of the parts of the Treaty that could lead to deeper integration without an amending treaty. It also has a lot to say on the future scope of European integration.

The press release is certainly worth reading in full, and it’s only seven pages if you copy and paste into Word – useful for highlighting. If you have time to read the judgement in full it’s more like 119 pages, but I think for those geeks of European integration and judicial philosophy out there it will be well worth a look.

I was going to wait to comment on this before I’d seen what the highly-recommended German Law Journal had to say about it (its discussion of a 2006 ruling is a great example). Then I noticed this evening that Nosemonkey had come out with some very interesting analysis into the ruling, and thought I’d try and get my initial thoughts down before seeing what any more people had to say on the matter.

As with many decisions it hands down, Germany’s Constitutional Court (or Bundesverfassungsgericht) did not pull any punches or avoid the opportunity to delve into areas of deep political and philosophical debate.

On a very simplistic level, the most important thing to point out is that the court upheld the compatibility of the Lisbon Treaty with Germany’s highest law, its Grundgesetz, or Basic Law*. However, in striking down a law on the participation of the Bundestag and Bundesrat in the EU post-Lisbon, it  made several highly significant rulings, both on the interpretation of the Treaty required in order to maintain this compatibility, and on the direction and endpoint of European integration. A fuller summary of its ruling is below, but essentially, it argued that any changes to Treaties (which, under Lisbon, could in certain circumstances take place without another inter-governmental conference) must be approved by the German Bundestag (and on occasions the Bundesrat too – the upper house), rather than simply a decision of the government.

Some of its strongest rulings came on crime and justice cooperation. It ruled that the crime and justice competences must be interpreted “strictly – on no account extensively -, and their use requires particular justification“. Additionally, where Lisbon envisages a fairly broad power for the Council to extend the list of serious crimes which would come under the EU’s competence, addition to this list would require primary legislation in Germany. The German Basic Law, the court ruled, does not permit a “Kompetenz-Kompetenz”. That is, it does not permit “the transfer of competence to decide on its own competence”.

European integration: obligatory for the German government, but tightly restricted

The Constitutional Court powerfully states that “The constitutional mandate to realise a united Europe which follows from Article 23.1 of the Basic Law and its Preamble means with regard to the German constitutional bodies that participation in European integration is not left to their political discretion.”

Germany is obligated to participate in European integration under its Basic Law. However, the Court significantly restricts what it means by participation in European integration:

European unification on the basis of a union of sovereign states under the Treaties may, however, not be realised in such a way that the Member States do not retain sufficient room for the political formation of the economic, cultural and social circumstances of life… This concerns in particular the administration of criminal law, the civil and the military monopoly on the use of force, fundamental fiscal decisions on revenue and expenditure, the shaping of the circumstances of life by social policy and important decisions on cultural issues such as the school and education system, the provisions governing the media, and dealing with religious communities.

European Union as a federal entity: not only unconstitutional, but impossible within the existing constitutional order

The judgement argues that to create a European federal state would require a new constitution. This is because according to the Basic Law (Art. 79.3), “An amendment of this Basic Law affecting the division of the Federation into Länder, the participation in principle of the Länder in legislation, or the basic principles laid down in Articles 1 and 20, is inadmissible.” Article 20 states:

Article 20 (Basic principles of state order, right to resist).

(1) The Federal Republic of Germany is a democratic and social Federal state.
(2) All state authority emanates from the people. It is exercised by the people by means of elections and voting and by separate legislative, executive and judicial organs.
(3) Legislation is subject to the constitutional order; the executive and the judiciary are bound by the law.
(4) All Germans shall have the right to resist any person seeking to abolish this constitutional order, should no other remedy be possible. (inserted 24 June 1968)

The transition into a federal European Union can thus not happen through a series of intergovernmental conventions. It can only happen if the German Basic Law ceases to be in force, which would occur “on the day on which a constitution adopted by a free decision of the German people comes into force” (Art. 146). This need not be a referendum: the Basic Law had to be ratified by two thirds of state (Land) legislatures, and Germany has been very suspicious of plebiscites since the end of the Weimar Republic. In any case, Article 20.4 provides the right of insurrection against any person seeking to abolish the constitutional order. The point, then, is that a federal European state would require an overthrow of the German constitutional order which renders this idea virtually impossible. Germans would have a legal right to insurrection against such a federal European state.

A federal European state, which in any case was unlikely, is expressly forbidden within the context of Germany’s existing constitutional order.

Democratic legitimacy of European institutions

The Constitutional Court went further than it needed to, in discussing the European project itself. It made some not-too-subtle hints that it might not be so accommodating in accepting the constitutionality of future Treaties. It, furthermore, stridently criticised the lack of powers of the European Parliament in stating that

The further development of the competences of the European Parliament can reduce, but not completely fill, the gap between the extent of the decision-making power of the Union’s institutions and the citizens’ democratic power of action in the Member States. Neither as regards its composition nor its position in the European competence structure is the European Parliament sufficiently prepared to take representative and assignable majority decisions as uniform decisions on political direction.

It also indicated a problem in that “its election does not take due account of equality” – which is a product of the 27 member states being able to decide their own electoral systems for choosing their country’s representatives in the European Parliament. It cannot have a politically decisive effect in European institutions.  As a result, it states:

Due to this structural democratic deficit, which cannot be resolved in a Staatenverbund [union of sovereign states], further steps of integration that go beyond the status quo may undermine neither the States’ political power of action nor the principle of conferral.

This is very significant stuff. The ruling insists, at least to an extent, on a democratic deficit, if the existing constitutional order is to be maintained. Power can be delegated to European institutions only to a limited extent, and only through member states’ constitutional bodies as representatives of the people, in the Council of Ministers.

As long as, consequently, no uniform European people, as the subject of legitimisation, can express its majority will in a politically effective manner that takes due account of equality in the context of the foundation of a European federal state, the peoples of the European Union, which are constituted in their Member States, remain the decisive holders of public authority, including Union authority.

The Constitutional Court accepted the constitutionality of the Lisbon Treaty. But in reaffirming the inter-governmental nature of the EU, it underscored the right of Germany’s national parliament to participate in the legislative process, striking down the verbosely-titled “Act Extending and Strengthening the Rights of the Bundestag and the Bundesrat in European Union Matters”. In doing so it put definitive limits on the extent to which “ever-closer union” may continue.

***

Briefly, it ruled that:

1. “The approval of [...] Germany in simplified revision procedures requires a law”, rather than merely the assent of the government. (3bb)
2. “The representative of the German government in the European Council may only consent to a Treaty amendment brought about by the application of the general bridging clause if the German Bundestag and the Bundesrat have adopted … a law”  (3cc)
3. “The veto right in the Council may not be waived without the participation of the competent legislative bodies even as regards subject-matters which have already been factually determined in the Treaties. The representative of the German government in the European Council or in the Council may therefore only consent to an amendment of primary legislation through the application of one of the special bridging clauses on behalf of the Federal Republic of Germany if the German Bundestag and, to the extent that this is required by the provisions on legislation, the Bundesrat, have approved this decision” (3dd)
4. “Also the flexibility clause under Article 352 TFEU can be construed in such a way that the integration programme envisaged in the provisions can still be predicted and determined by the German legislative bodies. With a view to the undetermined nature of possible cases of application, the use of the flexibility clause constitutionally requires ratification by the German Bundestag and the Bundesrat” (3ee)
5. “The Federal Constitutional Court’s competence of review is not affected by Declaration no. 17 on Primacy annexed to the Final Act of the Treaty of Lisbon. The foundation and the limit of the applicability of European Union law in the Federal Republic of Germany is the order to apply the law which is contained in the Act Approving the Treaty of Lisbon, which can only be given within the limits of the current constitutional order.” (3ff)
6. “The competences that have been newly established or deepened by the Treaty of Lisbon in the areas of judicial cooperation in criminal and civil matters, external trade relations, common defence and with regard to social concerns can, within the meaning of an interpretation of the Treaty that does justice to its purpose, and must, in order to avoid imminent unconstitutionality, be exercised by the institutions of the European Union in such a way that on the level of the Member States, tasks of sufficient weight as to their extent as well as their substance remain which legally and practically are the precondition of a living democracy.” (3gg, my emphasis)

Finally, on the last point – in the field of criminal civil matters,  external trade relations, defence, and social concerns:

- Due to the fact that democratic self-determination is affected in an especially sensitive manner by provisions of criminal law and law of criminal procedure, the corresponding foundations of competence in the Treaties must be interpreted strictly – on no account extensively -, and their use requires particular justification.

- The use of the dynamic blanket authorisation pursuant to Article 83.1(3) TFEU to extend the list of particularly serious crimes with a cross-border dimension “on the basis of developments in crime” is factually tantamount to an extension of the competences of the European Union and is therefore subject to the requirement of the enactment of a specific statute.

- In the area of judicial cooperation in criminal matters, particular requirements must additionally be placed on the provisions which accord a Member State special rights in the legislative procedure (Article 82.3, Article 83.3 TFEU: so-called emergency brake procedure). From the perspective of German constitutional law, the necessary measure of democratic legitimisation via the national parliaments can only be safeguarded by the German representative in the Council exercising the Member State’s rights set out in Article 82.3 and Article 83.3 TFEU only on the instruction of the Bundestag and, to the extent that this is required by the provisions on legislation, of the Bundesrat.

- Parliamentary approval will still be required for deployment of German forces

* German does have a word for ‘constitution’ (Verfassung), but the term ‘Basic Law’ was chosen in 1948 as this document was not envisaged to be particularly permanent, pending reunification with eastern Germany, or what was to become the German Democratic Republic. (I think, anyway.)

It’s crunch time on capital hill as the Obama administration puts its political capital on the line for the House to pass the Waxman-Markey bill. For those of you who don’t know, the Waxman-Markey bill is the first Climate Change bill to be introduced in the US ( on a federal level).

So what does it promise? (See here for a more comprehensive overview)

• To reduce US emissions on 2005 levels by 17% by 2020
• To bring US emissions down by 80% by 2050
• 25% of US energy by 2025 must be renewable
• A Cap and Trade system, 85% of permits will be auctioned off
• 2 Billion tons worth of carbon offsets
• A whole host of other measures from building efficiency, fuel standards and even a new technology bank!

Ok it’s been watered down, see Kelly McManus’ coverage at Climatico to,how its been watered down. Worse the Senate will be an even tougher battle with a smaller Democratic majority, and still no Al Franken *sigh*, but make no mistake, this bill is a game changer.

For a long time, I’ve had a list of things I would like Obama to do ( not including saving the US economy):

1. Health care
2. Climate Change bill
3. Immigration Reform
4. Gay rights

That isn’t a definitive list but if he got those down, that would do for me. Although far from perfect, this Climate Change bill is the only realistic chance of success in combatting Climate change, not simply because the US is the world’s second largest polluter but because it is the world’s superpower and the largest economy. If the US  was not willing to take serious action against Climate Change, China India and the rest will never get on board. As we head towards crucial Climate negotiations at the end of this year and the beginning of the next this is probably the only chance the US has of passing a serious Climate Change bill in time, to show it is willing to take serious leadership

And to be honest, the Democrats won’t have it this good for a long time, at best they will keep a hold in the 2010 mid terms, there is a small chance they’ll be able to expand and a good chance they will slip a little bit. They have a large majority in the house and IF Franken were ever seated would be looking at filibuster proof majority in the Senate. The time really is now.

So if it passes what then? Well if it passes, it still ahs to go and get watered down in the Senate, but if it survives that and the Republicans don’t use the fillibuster than a framework has been set for the US to reduce Climate emissions. With luck this will change the nature of debate for further incremental legislation to strengthen the legislation, critical to this will be:

• Proven success of green jobs, already a growing number of economists and think tanks ( e.g. Pew Research) have come out in support – that green can be good for the economy.
• An economic upturn in general, weakens the hand of those who oppose the bill purely on economic grounds.
• The continual reduction in climate sceptics as evidence already insurmountable continues to pile over, until Republicans realise that opposing near total majority of world scientific research is ridiculous, this could take a long time, but if enough of the American public are convinced, Republicans may eventualyl change their tune. Then the debate will be about the type of policy rather than the exisitence of Carbon Dioxide :-p

The House votes tommorow, fingers crossed.

by TfUnQ

Is the European Union at a decisive point?

The Constitutional Treaty was savagely beaten by the Dutch and by the French.  Awkwardly righting itself ike an overweight middle aged boxer, convinced that its younger and sprightlier opponent ( the citizens of each European country) will fall victim to its experience, it crafted a new treaty. The Lisbon treaty, cunningly devised to make things like flags non-binding ( and yes it was a little paired down in other areas).  The leaders of the EU sent this one flying back at its citizens and this time avoided those awkward referendums by letting parliaments vote. After all, nothing says democracy like keeping out the people – not burdening their minds with issues or even giving them the chance.

This approach seemed to work until the Irish, actually did give their citizens a referendum and then it was voted down. Now,  I admit the anti-EU vote was a bit ridiculous in Ireland, with a mish-mash alliance of all loading up on one ticket. The “No” group had anti-abortionists, anti-immigrations, sovereignty issues that the EU was not touching on aswell as a good old mix of domestic politics, and the pro-EU group launched a rather half-hearted campaign failed to really engage the population despite the fact the EU was a core element in making the Irisi=sh economy as successful as it has been.

Then came the European Parliamentary elections, which told us little except what we already knew. That most people, but above all the English will treat it as a vote on national politics, that some countries will neatly forget everything the EU has done for them, Austria I’m looking at you,  and other countries will demonstrate just how sickeningly successful :-p their country is, by devoting large chunks of their vote to the single issue of Internet piracy laws…Sweden. However the overwhelming message, if not Euro-scepticism was “couldn’t care less-ism” with a whopping 57% of Europe just not bothering.

Since then, the a second round on the Lisbon treaty is being prepared in Ireland, with a couple more opt-outs and time for the Government to reassure the population that the EU will not be interfering on some key key issues, it appears the vote will get the yes. Then what?

Is the EU actually in a crisis? Nosemonkey reacting to a fellow blogger’s conversion to Euroscepticism had this to say:

I know how he feels.

This is a vital, fundamental problem that the EU seems repeatedly unable to address – it is excruciatingly hard to be enthusiastic about the European Union. No matter how much you try, the more you look into it, the more you see its flaws. The more you look for sensible ideas for its future purpose and reform, the more you see the tsunami of inadequates that tend to gain positions of power in the damn thing rise up and threaten to swamp the whole project in a deluge of tedium, petty squabbles, meaningless jargon and total lack of vision.

All of which is true, but where is the glimmer of light? Well about wheres it usually is.  It lies with the trundling technocratic engine of the EU eventually serving up something more palatable, more people driven than they currently have. The Lisbon treaty is not the answer, it is a little closer to the answer with more power to the European Parliament, it makes the European Union a little more democratic, a little less technocratic and brings MEP’s a bit closer to being able to truthfully say that the European Union is abobut the people.

Thats the start, but that alone won’t make a huge differnece, it at best further weakens Euro-sceptics position that the EU is completely undemocratic.    The more important detail probably lies int he creation of a President of the European Council,  (rather than the rotating chair approach we currently have). While this could go either way, a figure-head with a larger presence on the international stage, i.e. a former Prime Minister could potentialyl bring the work, and direction of the European Union much closer to home.

At present the European Union leadership, if it can be called that it a micture of Barroso, a man who endeared himself to the British public by saying  the people “that matter” in the UK  are talking of joining the Euro ( making him rude, elitist and wrong), and the rotating head of the EU Presidency, that would be Czech President, Vaclav Klaus, who described the EU as a “failed and bankrupt entity”. If the E?U were to instead appoint somebody with a big name and good communication, to be leader that could give voice and shape to the EU’s role then that may prove enough to start an undoubtedly slow and gadual process of citizenry engagement, that might eventualyl turn the EU into something that people could understand and one day, even relate to.

But I wouldn’t hold your breath, not only does the Lisbon treaty still have to pass, but some of the proposed candidates for this “Presidency” are not exactly the stuff of dreams – here’s a few:

Mr Tony “Iraq Waq” Blair – actually probably a good choice in terms of Blair’s understanding of where Europe needs to be heading (CAP reform, streamlined decision making but the Iraq war still makes him a polarising figure on the continent).

Jean-Claude Juncker – Prime Minister of Luxembourg, probably a terrible choice and UKIP’s dream candidate, because he comes across as a bureacratic dull and totally lacking in wider popularity or name recognition becuase, well he’s from luxembourg.

Bertie Ahern – once suggested probably not so likely, Bertie isn’t a terrible choice at all but is he a big enough player on the European stage?

Angela Merkel – Not sure how likely this/ any of these are but I’m quite fond of Angela, proving herself a pragmatic and effective politician in Europe’s powerhouse Germany, she would have strong credentials.

All things considered however, I wouldn’t hold your breath

Predict09.eu is a prediction of the outcome of the June 2009 European Parliament elections and the resulting make-up of the next European Parliament. The prediction is based on a statistical model of the performance of national parties in European Parliament elections, developed by three leading political scientists: Simon Hix (London School of Economics), Michael Marsh (Trinity College Dublin), and Nick Vivyan (London School of Economics).

The prediction will be updated each week until the elections on 4-7 June.

Their model analyses the expected make-up of the next Parliament by bloc and by member-state.  Some highlights and analysis below the fold:

• The new Tory-led “European Conservative” bloc could well be the 4th largest grouping in the Parliament, and in percentage terms will reduce the size of the EPP from 37% of current MEPS to 34% of future ones.
• UK predictions: Labour +3; Lib Dem +1: Tory – no change; UKIP* – 8; Green – 2 (i.e. wiped out).  No prediction for the BNP other than the fact that they could “possibly win a seat” (more on this from the Hope Not Hate campaign).

*Incidentally, when you google UKIP, the description you’re presented with is: “Libertarian, non-racist party seeking Britain’s withdrawal from the European Union.”  (Umm, if you have to convince people….)

If these numbers seems strange, remember, although it seems long ago now, that Labour are starting from a very low base and the Tories from a very good one.  Labour currently have 19 MEPs, down from 64 in the 1994-1999 Parliament (!).  The 2004 European elections were dominated by Iraq and a desire to punish Tony Blair without the risk of a Michael Howard Government.  A similar but reversed dynamic will likely see the Parti Socialiste losing seats to Sarkozy’s UMP despite the latter’s unpopularity.  This raises an interesting question for UK domestic politics.  Doubtless, the Tories and the media will highlight the “low base” point – but it seems inherently unlikely that the European elections can be the unadulterated disaster for Gordon Brown that some have predicted.

And as for the Commission:

On the basis of our predicted make-up of the next European Parliament, José Barroso has a good chance of being re-elected as Commission President. However, this assumes that the Liberals (ALDE) would support an EPP-Conservative coalition in support of Barroso, which is not a foregone conclusion. An alternative “progressive” coalition, of Liberals, Socialists, Greens, and Radical Left MEPs could still block the re-election of Barroso.

One last point.  It’s interesting to note that, although the European elections are only two months away, UK media coverage has been pretty poor (compare, for example, to dedicated coverage of the US elections two years in advance – yes I know, Barroso’s no Barack).  This is further evidence, in my opinion, that UK opinion makers are just not making the effort to make the EU accessible to the British people in the way that other governments and media outlets do.  For those with a sprinkling of French, for example, this special section of Le Monde.fr, with its interactive graphics, interviews and profiles, provides a striking contrast.

Oslo Fjord

I know what you’re thinking. In the midst of all this talk of an economic crisis, the G20 and accompanying protests and police brutality, and Brown’s recent trip to the US (for which he received a DVD box set, not even the correct region – poor Gordon), we’ve lost sight of our priorities. The crucial question that everyone’s dying to have answered is this: how’s Norway getting on?

The answer, Norway  fans, is not too shabby. The country is faring a lot better than many other European countries, particularly thanks to its oil wealth. Unemployment, traditionally very low, is still only 3.5%.The base rate is still at 2.5%, far higher than the UK and the Eurozone, where central bank lending rates are at 0.5%. This is not to say, however, that Norway hasn’t been impacted by the credit crunch: that base rate is still 325 basis points lower than October 2008, and the value of the Norwegian government’s domestic $12bn pension fund (supported by oil wealth) fell 25% in 2008, although the far larger “Global Pension Fund”, at some NOK 2.12 trillion (about £200mn), may well be more resilient. They must be pretty pleased they reduced the proportion of that pension fund held in global stock markets in August last year from 60% to 50%…

Coffee, Scone and Jam

I visited Oslo in February, on a slightly impulsive Ryanair detour back from Verona (sorry environment!) Perhaps I’m generalising, as I didn’t go outside the capital, but Norway really is a fascinating place. I was only there for a day and a half, and Oslo is a fairly small city by UK standards, but that provided plenty of things of interest. There was always fresh snow on the ground and a top-notch coffee shop just around the corner – and just as well: Norwegians drink more coffee per head than anyone else in the world. This particular one, just behind the lightly-guarded royal palace, served freshly brewed ethical coffee and chunky scones with walnuts, accompanied with a large glass of jam and copious amounts of butter for about £3.50, a bargain in Norway. Unfortunately it was such a bargain, and so warm inside thanks to the log fire, that I had two, which rather reduced the cost-effectiveness… The newspaper was interesting, too; I couldn’t understand a great deal of it (obviously) but at least the first four pages of a fairly small newspaper were devoted to commentary and opinion.

There are two things which are almost universally known about Scandinavia: it’s pretty cold (in winter at least) and pretty expensive, particularly alcohol. Both of these facts held true while I was there. Thanks to my inappropriate choice of clothes and having flown in from balmy northern Italy, I was especially affected by the former, and my advice (although it should be pretty obvious) would be: hats, gloves, shoes and thermal underwear. It was actually so cold that the buttons on my phone stopped working.

Norway from the train

As for cost – yeah, it is expensive. I chose to get the £45 train rather than the £30 coach from the Sandefjord/Torp Airport (typically Ryanair, labelled as Oslo, but actually 1½-2 hours away). However, due to a sudden snow fall, the train wasn’t running so we had to get a rail replacement bus. Regular travellers of UK railways will be well acquainted with the rail replacement bus, but despite the more extreme weather in Norway it’s pretty unusual there, and a lot more comfortable – a double-decker luxury coach with bags of space. This meant that it took slightly longer to get into the city, but it also meant that my ticket didn’t get stamped – so I cunningly got a refund from the station the next day. I also managed to wangle a student ticket on the way back using my Union card which doesn’t have an expiry date, so the whole £45 journey cost me about £16! Hurrah! My hostel then cost about £25 for the night (including sheets and a towel – lots of Norwegian hostels tack on an extra £5 for this privilege). This turned out to be slightly more expensive, however, as bizarrely someone stole my dirty clothes.

Slottet (Oslo's Royal Palace). You can walk right up to it; it's in the middle of a park. There aren't even bars on the windows.

On the rail replacement coach from the airport I also started talking to two incredibly friendly girls – well, they started talking to me, I obviously had a pretty confused look on my face. It turned out they were both in the Baha’i faith, and they proceeded to explain what that meant (basically: let’s all just chill out and be nice to each other, yeah?). They’d flown in from Frankfurt where they’d been at a Baha’i conference. Only one of them was actually Norwegian, the other was a Texan studying international health, I think – it turns out it’s sickeningly cheap to study in Norway: £30 a semester, for a Masters. What an awesome country. The conversation turned to how one of them had received a pretty grumpy and unsympathetic reception from a customer services assistant at the train station in Oslo – the American girl suggested it was because it was a socialist country, and so people felt it was the government’s responsibility to take care of people, rather than every individual to one another. (So does government replace community, or is it in an expression or community? Or perhaps it was just a single anecdote which didn’t actually mean anything)

Downtown Oslo

Beer is certainly pricey in Norway, a 300ml bottle in a bar in the trendy Grünerløkka neighbourhood cost me about £4.50. It was pretty busy for 2230 on a cold Monday night. While I was in that café I asked a middle-aged (it turned out, retired) woman why it was so expensive? I mean, everything seems more expensive in Norway (they’ve got a 25% sales tax) but particularly alcohol. She answered the question as if it wasn’t that big a deal, and said that it was probably partly due to the difficulty of transporting things to such a remote place. While this is true, it’s only half the answer, and the other part comes down to that scourge of pub landlords across northern Europe: excise duty. Norway has some of the highest rates of taxation on alcohol in the world, at €200 per hl3, more than double that of Ireland and the UK, and its neighbours Sweden and Finland. According to this guy, that makes a bottle of Absolut Vodka €37, €31 of which is pure tax. There are probably a number of reasons for this: the necessity of having high rates of productivity, especially in the postwar environment; strong protestant morality; and combating drunkenness and alcoholism. The latter is really difficult to avoid in a country like Norway which has very hard and psychologically challenging winters, and it seems as though the UK is to a certain extent following down the same path of trying to regulate alcohol consumption via price rationing. But as Ed pointed out in a post on this blog not too long ago, this seems to be a really poor way of going about it. The real problem comes not from a quiet drink in a sociable, supervised and regulated environment like a pub. It actually comes from buying cheap, strong alcohol in supermarkets and (to a lesser extent) off-licenses, and then drinking it in the street or your own home. Surely a better way of going about it would be to lower alcohol taxation in pubs, which in the UK are seriously feeling the strain at the moment, and commensurately increasing the taxation in off-licenses. (How about this interesting fact: almost half of all alcohol consumed in Norway is consumed by just 10% of the population.)

Storting (Norwegian Parliament). Opens around 9ish, closes when business is done. The Monday I was there, that was before 1300.

In the current economic recession, Norway’s not faring too badly, partly thanks to the fact that it is blessed with substantial quantities of oil and a relatively enlightened, forward-thinking political class. While Britain sold off its stake in North Sea oil long ago and spent its revenues as soon as they entered the Treasury’s coffers, Norway set up an oil fund in the early 1990s to provide pensions for the elderly and help ease the transition after oil revenues peaked. That fund has now reached some $200 million, and although it has been hit by the global downturn, as only 50% of it has been placed in relatively safe (and highly ethical) investments, it’s not doing too badly. Additionally, its banks have been less exposed to the risky loans and dodgy financial instruments which have wreaked such havoc in the UK and elsewhere. This is likely as a result of more conservative business instincts in the country, but it also stems from a unique 1961 law which states that any commercial bank with assets over £10 million has to have a quarter of its board members appointed by the government, and a responsibility to operate their business not just in a sound economic way, but also with regard to their social impact. On first impressions this seems quite radical, but it isn’t really: when banks have such a large responsibility for citizens’ savings, those citizens should play a part in the operation of the banks. It’s not that dissimilar from the mutual model which has proven to be relatively resistant to the shocks imposed by the current economic turmoil.

9th and 10th Century Viking Swords, in the History Museum. Norway is famed for its child-friendly museums

Nevertheless, like any country, Norway is no paradise; problems do exist. The retired woman I met in the scones and coffee café behind the royal palace used to work in the public healthcare sector, and said that there were increasing problems there, particularly surrounding the cost of treatment. In Norway there is a fixed fee that you have to pay each time that you go to the doctor. This may seem sensible, but it’s actually a really ineffective way of reducing unnecessary treatment, as well as being tremendously inefficient for the healthcare system as a whole; people put off going to see their GP for 10 minutes and instead only go to the A&E room when it becomes much more urgent – and, of course, much more expensive. A similar system is used in the UK with prescription charges, which bring in some £450 million, a figure that is set to significantly decrease following Gordon Brown’s October announcements on abolishing prescription charges for cancer sufferers, and those with “Long-Term Conditions”, a list which is almost impossible to define and ends up being almost entirely arbitrary.

Another problem, particularly in Oslo, is the cost of living which is amongst the highest in the world. That OAP in that café (it would have been much easier if I knew her name…) said that even with her relatively good pension from the healthcare system and the additional pension from the oil fund, she wasn’t left with a great deal of disposable income after paying her rent.

Nobel Peace Centre - Prizewinners Field

To a large extent, these are problems that most other countries face. Aside from that, Norway is a fairly unique place. It has a liberal political system with a strong belief that it owes a considerable debt to the world – and not because it’s ashamed of any imperial past; after all, it has none to speak of (unless you go back to the Vikings…). Rather, the debt appears to be quite simply because they’ve been fortunate and others haven’t. Accordingly, Norway gives 0.95% of its GNI annually in overseas development assistance, and plays host to a range of humanitarian, human rights, and peace-building organisations, including most notably the Nobel Peace Prize. They’re rather proud of this one in particular, in fact, and have an excessively interactive museum to show it off, including this fibre-optic field of prizewinners; the screens light up and jump around when you walk near them. (Actually, quite a few of them don’t – but nice try, Norway.) My student ID which worked so smoothly on the train back to the airport later that day hit a rough patch at the Nobel Peace Centre, as the man behind the desk correctly noticed that there was no expiry date – he asked if I had any other ID and I showed him a book I had, which seemed to work OK! As part of the museum was closed for refurbishment, I also got in at half price, so what should have cost £8 actually cost £2.50, another bargain!

So at the end of my brief stint in Norway, the view I came to was this: pretty cold, quite expensive (unless you have student ID), but fascinating, friendly, and really well worth a visit – probably more than a day and a half, next time! I’d need to read more into the Scandinavian model before I give it my sign of approval, and the level of alcohol taxation seems a bit excessive, but any country which serves such high quality coffee and has such friendly, liberal people seems like it’s on the right track.

photo credit: John Carleton

That’s right, Danes emit 5 tonnes of CO2 per person.  That’s not that terrible, but for a model country in the fight against Climate Change, it’s at least tantamount to having smelly armpits.  So what are the Danes doing?

Well that they are doing something is a start, but Denmark always seems to be able to do the right thing with ease, so they’ve decided to reform their transport structure to more Climate friendly cars, but I don’t mean a weak transition that will take 10 years to show any impact:

Currently there are only about 200 climate-friendly autos on the nation’s streets, but that should grow to 100,000 within two years.

That is incredible and not an insignificant number in a country the size of Denmark.

There are no surprises in the deal announced today to reform the banking system, to prevent banks making the kind of risky loans and investments that precipitated the worst global economic crisis since the 1930s.

But it’s nonetheless a historic event that the world’s 20 most powerful economies have signed up for these reforms – because they represent the death knell for the Anglo-American doctrine that economies flourish when financial firms are left alone to do as they please.

Indeed.

18:32 BST: Buried under all the G20 news has been the potentially groundbreaking meeting between Barack Obama and Russian President Dmitry Medvedev, which resulted in an agreement to reduce the nuclear arms of both sides much further than the current agreement demands. This could be very important…

18:30 BST: A wise comment from the Guardian’s Andrew Sparrow (whose live-blog was probably better than mine but nowhere near as epic!):

I’ve been busy updating our main story, having sat through the opening of Brown’s statement. First reaction: I found myself sitting there thinking ‘David Cameron could not pull off an event like this’. That’s not because I think Cameron’s a lightweight. I don’t. It’s because the most important summit conclusions involve international finance, global trade and the inner workings of organisations like the IMF and there are probably very few prime ministers or presidents in the world who understand this stuff as well as Brown.

18:20 BST: Lest I be judged  by my comments below to have been a bit too harsh on the protests, I want to stress that I have great respect for most of them. I say most of them, because the anarchists were just so annoying. Proper anarchism is really cool. It’s an extremely sophisticated ideology . These guys, however, were just pathetic. Bad anarchists!  The majority of protests, however, made some good points.The fact remains, though, that they surely made no difference on the summit at all. If you want to get something changed, you focus on it like a laser and you don’t go off message. But the protests were never on message to begin with – from homelessness to climate change to ending the war to the death of capitalism; only a minority were  actually focused on the topics of the summit! The question becomes then – did they really want to influence the summit? Or did they just want to get their message out there in a sort of vague picture of defiance?  In their defence, however, you could respond that they never stood a chance anyway: governments don’t respond to the people anymore. No-one listened to Iraq protests, for example and they were very focused. So it’s an interesting debate. But I do think that they could have maybe stood a chance at getting some traction if they focused on one message and, you know, stuck to it.

18:13 BST: Here’s the full text of the communique, courtesy of the Guardian. There’s tonnes of details here…

18:10 BST: Oh and I forgot to add that hedge funds and other non-banking institutions will come under the aegis of this new Financial Stability board. Since the mysterious financing of hedge funds helped to exacerbate the mess, this is also good news; but again it all depends on how strong the regulation is…

18:05 BST: The headlines are focusing on the issues of tax havens and that $1 trillion figure, but there’s tonnes of other stuff that’s just as interesting. For example, there’s going to be a new Financial Stability Board that will work with the IMF to monitor the risk of banking transactions and impose limits on things like capital reserves and leverage requirements (not to mention executive bonuses.) This is absolutely crucial in getting the banks back on track and preventing such a crisis happening again, since it was an inherent failure in the banks’s ability to evaluate “systemic risk” that made the crisis so bad. This is pretty complicated and I’ll come back to this another time, but suffice to say it’s a good move – that is, as long as this new regulatory body actually has proper regulatory oversight.

17:54 BST: A timely article over at Foreign Policy discussing whether protests ever work. I agree with its basic conclusion: protests have to be unified and targeted; and focused on changing the system not overthrowing it. The G20 protests were none of these things and so I’m afraid that they’ve had absolutely no effect whatsoever.

17:46 BST: Did Sarkozy and Merkel get their victory? Or was there never any “victory” to begin with? Everyone was in agreement over the basic regulatory provisions. and had been for weeks. The real controversy-  over the possibility of national stimulus packages – was won by Merkel and Sarkozy weeks ago, and so it was no surprise to see no such provisions today. However, Sarkozy must be feeling pleased that the language on tax havens was quite fierce. In the big picture, it’s not really much of an issue, but he’ll make a big deal of it, which is fair enough…

17:44 BST: Canadian PM Steven Harper’s absence in the photo is not going down well in Canada…

17:35 BST: Mark Brough in the comments points out, completely correctly, that I’ve been claiming all through this live-blog be on “GMT” time – Greenwich Mean Time – when in fact, because the hour went forward last week, we are now on “BST” – British standard Time…. Um… My bad!

17:20 GMT: Okay, they’re replaying Sarkozy’s press conference; he’s really laid it on thick… “There’s something moving about this…”; “Who could imagine?”  Definitely basking…

17:14 GMT: Question from Mark Bailey in the comments: does Brown get a boost in the polls from this? Hmm, tricky one that. On the one hand, this trillion dollar figure could backfire; it’s not quite what Obama and Brown wanted in the sense that there’s no commitment to plow government stimulus packages directly into G20 countries. Further, we should expect to see many journalists tomorrow asking the question: How does this help us? How does this help Britain? After all, it’s hard to see how increased IMF funding for developing countries helps the unemployed back in Britian. However, I find it hard to believe that he doesn’t get at least a small boost. I mean, come on: for two days he’s been the public greeter, charman, conductor and organiser of the world’s twenty most powerful people. He’s  even managed to outshine to Obama… (who has appeared quite tired) Moreover, though you can argue over how concrete the provisions are,  there’s no doubt that this is a groundbreaking agreement. And as long as you think globally, then the agreement is very good for Britain in terms of more secure, regualted international finance and trade . The trick for Brown will be getting the British people to realise this. It’s not an automatic thought process; but if he gets the point across then he could get a very significant boost. I still think he’d benefit from giving us a proper stimulus, though…

17:09 GMT: Didn’t listen to French President Nicolas Sarkozy’s press conference, because it was, if you believe it, held at the same time as Gordon Brown’s! Oh, Sarko! But the consensus seems to be that he did a lot of boasting on his achievements re. hedge funds, strong regulation and, crucially, tax havens. Arguably he deserves to boast – he got the strong language he wanted on tax havens; the naming and shaming in particular. He also apparently did some typical admonsishing of journalists. Never a dull moment with this guy…

17:00: GMT: Gordon Brown spoke well at his press conference and the final communique is, on the face of it, pretty impressive. But the criticisms are already forming: is the language against protectionism strong enough? Are there any provisions to force everyone to stick to these agreements? Are there really any sanctions against tax havens? And crucially, is the $1 trillion “stimulus”  really a stimulus, or just a series of provisional loans? There’s certainly no concrete agreements to force governments to plow stimulus money directly into their own country – no direct stimulus. But make no mistake, the IMF funding etc is very significant.

16:40 GMT: Okay, so all the rumours are no more and now we have the final communique – the final version. It’s incredibly complicated, as you might expect. My head hurts just thinking about it. The “headlines” appear to be the following:

- A $1.1 Trillion global stimulus comprised of: $500 billion in extra funding for the IMF; $250 billion in “special drawing rights” – in effect a cheap IMF overdraft facility for poor countries – $250 billion in world trade funding and $250 billion  for “multi-lateral development banks” like the world bank to give to really poor countries

- a multi-tiered “blacklist” list of tax havens that is being published today – here comes the naming and shaming!

16:35 GMT: Clever Channel 4 question: What are the sanctions to make sure countries actually do all this stuff? Brown points out that the IMF will be watching and assess it regularly, and we’ll meet again to check up on stuff in the autumn. Hmmm….

16:31 GMT: What does this mean to the person watching at home? Brown responds by emphasising that today’s developments means that people’s savings, investments and businesses will soon be much safer. “Dealing with the international hurricane that has lashed our shores as well”.

16:27 GMT: Really geeky question about tax havens; basically asking is this really the end of tax havens? Brown says this is the start of the end; a major step forward; outlines three-tier system of tax havens as I described below. We’ll expand the reach later, says Brown.

16:22 GMT: Oooh…. an interesting question from a Chinese journalist: “you say the era of washington thinking is over, but is the era of washington currency”… he’s talking about the possibility of a global reserve currency as proposed by the Chinese. Hope Fox news doesn’t get onto this, as they seem to think that this means replacing the dollar altogether! Brown explains it well…

16:19 GMT: A CNBC guy asks about the controversial breaches of EU countires re. protectionsim: Gordon Brown responds by reiterating that the kind of world trade funding seen today is a boon for free trade.

16:15 GMT: Nick Robinson, the annoying BBC political correspondent asks his question: and his mic doesn’t work! Hahahaha! When he finally asks his question, he tackles one of the main issues, albeit in an annoying, disingenuous way: isn’t the “stimulus” just a series of loans that isn’t techncially a stimulus and won’t help, for example, people in the UK? Gordon Brown rather niftily turns round by pointing out that since we now have a global stimulus, it turns out that the main controversy everyone was talking about wasn’t actually a controversy at all. Clever, although Robinson may have a point about the nature of the “stimulus”. This needs more analaysis later…

16:10 GMT: Gordon Brown is speaking. Lots of stuff here. Six main pledges:

1. Reform the banking system
2. Clean up banks’ toxic assets
3. $1 trillion global stimulus, mainly to the IMF (as described below)
4. Action on global poverty
5. Kick start international trade
6. Seek agreement on post 2012 climate change plan

More analysis later, but first let’s see the questions.

15:53 GMT: Mark Bailey again, from the comments:

I’ve said it once and I’ll say it again: I love Sarkozy!

15:46 GMT: Surely not: it’s looking like Gordon Brown’s closing remarks might be happening at the same time as French President Sarkozy’s press conference! What??? Split screen chaos, here we come!

15:44 GMT: Meanwhile, here’s what we haven’t heard about in detail but we’ll probably see: Fairly strong but not watertight language against protectionism, fairly strong regualtions for hedge funds, possibility of a general regulatory body for global banks, stricter capital/leverage requirements, a new system for regualted ratings agencies, and super-vague language on public stimulus packages. Oh, and maybe some bonus crackdowns too.

15:34 GMT: While we wait, another summary of what we (probably) know so far is definitely part of the G20 agreement:

A package of over a trillion dollars, technically a stimulus package, (see my comments below) which consists of a $750 billion increase in IMF funding that can be used to help developing countries, a $250 billion increase in “special drawing rights” for the IMF – the cheap overdaft facility for poor countries that I talked about below – and at least a $100 billion funding for world trade. Also, an agreement to publish a multi-tiered blacklist of tax havens.

15:30 GMT: Mere minutes away from the Press Conference. This is definitely it, people!

15:28 GMT: Papers including the Guardian are calling the decision to delay publication of the tax-haven blacklist as a partial defeat for France in favour of the likes of China. Perhaps, but you really have to stress the word partial…

15:22 GMT: I’m now into my ninth hour of live-blogging, and I have to say I have enormous respect for the kind of established bloggers who do this regularly… I’m exhausted. The G20 summit may save the world’s economy, but it’ll be the death of me…

15:17 GMT: The BBC just replayed an interview from earlier with UK Climate Change & Energy Secretary Ed Milliband, who gamely tried to assert that climate change issues were also being addressed at the G20 today. Nice of him to try, but I can’t think of  a single provision that will help the environment. Best he can hope for is some vague niceties. And quite right too: this is about saving the economy. Climate change can come later…

15:14 GMT: For more on tax haven news and details, see the Financial Times. Note also that the G2O won’t be publishing a list today; there’ll just be a vague mention of it and then the OECD itself will actually publish the list later…

15:12 GMT: News is leaking out about the decisions on naming and shaming tax havens… basically there’s going to be a sort of three-tier list published by the OECD (Organisation for Economic Co-operation and Development). One tier will be the sort-of-good-guys: the countries that have already shared information.  Then there’ll be the countries that are sort of promising to do so. Then there’s just the downright naughty ones that aren’t doing squat. So, sort of like a, uh, multi-hued blacklist….

15:11 GMT: Okay, just  a red herring… no press conference yet.

15:10 GMT: Here we go…… Gordon Brown speaks!

15:06 GMT: Funny how things turn out – all the talk about how Gordon and Barack won’t be getting their global fiscal stimulus, and yet now all the news is focused on a  global fiscal stimulus. Of course, the devil’s in the details: this isn’t the kind of stimulus we’ve been talking about that will directly help the populations of developed countries like Britain and the rest of Europe. It’s a stimulus via the IMF, as I described below. On the other hand, this is a big boon for developing, poorer countries. However, it doesn’t look like there’s going to be a new public spending fiscal stimulus for any developed countries. This could cause problems for Gordon Brown, since we may end up with a summit that, commendably, helps brazil and India but doesn’t directly help the UK…

14:59 GMT: It’s looking like all the measures I described a few updates ago – funding for the IMF, special drawing rights for the IMF, increase in world trade funding – are going to total around $1 trillion dollars. Expect, therefore the “trillion dollar stimulus” to be one of the main headlines to come out of today’s agreement – funny how everything always comes to a nice round number, isn’t it?

14:38 GMT: Okay, I understood nothing that Bob Geldof just said. I’m not entirely sure he did, either.  I think he just woke up and walked into the building and started quoting his dreams or something. Great stuff, regardless.

14:37 GMT:  “But the truth is that they may as well protest against themselves, because we sucked on the tit of free money and the bloated bubble that burst was us.” -  Bob Geldof, being interviewed by the BBC!

14:25: Following on from Lewis Hamilton’s punishment, more proof that this is a great day for the burying of bad news: Israel’s new foreign minister, the notorious racist Avigdor Lieberman, recently announced in his inaugration speech that the Annapolis peace agreement of 2007 has no force because it was never ratified by the Israeli parliament. More evidence that Israel’s new  extreme right-wing government has no interest in a two-state solution…

14:22 GMT: Via Matthew Yglesias, why IMF reform is so welcome

14:19 GMT: I wonder why all the news and rumours coming out of the meetings are focused on stimuli of things like the IMF and world trade, but nothing on regulations? Does that mean that everyone’s in agreement on things like hedge funds, tax havens and regualtory bodies, or does it mean that there’s so much disagreement that there’s nothing concrete enough for a rumour? I suspect the former…

14:11 GMT: A couple more points to add to what I’ve written below: First, the news I just described does seem to be concerned with what is in effect a kind of global stimulus, though not the kind we’ve been talking about the past few weeks. Basically it seems like the IMF itself is being given a stimulus in order to help struggling countries. As for the “special drawing rights” I talked about, this is really big news: if you didn’t get my explanation below (and I don’t balme you, it’s horrifically complicated) then let me simplify further: it’s a cheap overdraft facility for struggling countries. It’s too early to tell whether this is all true, or even if it’s that good… but this is definitely big news

14:09 GMT: Let’s see what we know so far. First, it looks like there’s been an agreement to triple IMF funding to $750 billion – it was previously thought to be only being doubled. This effectively menas that surplus countries like China will be helping to fund a massive spending boost for the world’s economy, which will particularly aid the struggling developing countries, who can be bailed out by the IMF if they get into trouble. Further, it looks like around $200 billion dollars will be provided to boost struggling world trade. Finally, there’s something that’s being called the “global equivalent of quantitative easing” – a fantastically complicated scheme called ’special drawing rights’ that is being funded to the tune of a $250 billion. Basically, in really simple terms this is how it works:  the IMF creates the money for a”cheap overdraft facility”, whereby countries who can’t afford to lend in normal markets get to lend at really cheap (American) interest rates from the IMF. This cheap overdraft facility is being mainly funded by America and China, who will get a lot of the money back through a complicated system of loans. For more on all of this, see BBC business editor Robert Peston’s blog and the blog of the BBC economics editor Stephanie Flanders.

13:52 GMT: After Canadian Premier  Steven Harper was caught in the toilet for the first official photo, Italian PM Berlusconi went and missed the second one! And the Saudi King didn’t turn up either! This is getting pretty funny…

13:46 GMT: I don’t want to sound patronising, but I can’t help but wonder what some of the protestors today hope to achieve. I’m referring specifically to those protesting about climate change or ending war etc… These issues, though important are very much not on the table today  – and they were never going to be, because we’re in a devastating economic crisis. And as for the people protesting about the Congo; a crucial and scandolously overlooked issue, I grant you, but in terms of recognition you could not have picked a worse day! Come on people. This is basic PR…

13:38 GMT: Okay, I want to briefly look at the subject of rating agencies – one of the not-so-exciting but still crucial issues on the table today. Basically, ratings agencies are responsible for giving a grade to the financial instruments of banks – so, for example, a premier investment bank would expect to be given a triple A rating for its bonds and other securities. The better your grade, the less risky a financial institution used to be perceived. The problem was, since banks could choose their rating agencies,we had the situation where the agencies themselves were loathe to downgrade the ratings of banks, lest no-one want to use them. Thus high grades were given to what was essentially junk and no-one knew it was junk till it was too late. Hopefully today we will see a solution to this problem, whether this be government controlled agencies or randomly assigned agencies…

13:11 GMT: Emily Buchanan of the BBC had a good line, saying the summit meeting was like the “Challenge Aneka” of global politics. She also pointed out that each world leader effectively had eleven minutes to make their case… (though presumably someone could always get some more time by nicking the eleven minutes of, say, Australia or South Africa…)

13:06 GMT: Reports flying around of breakfast discussions with finance ministers in which they’ve agreed that tax havens need to be named and shamed through some kind of published list – but when will it be published? Also, it looks like $250 billion dollars of drawing rights have been created for the IMF. This is very complex, but it’s sort of like saying to the IMF: create some new money for us! It’s good news anyway…

13:04 GMT: The canadian prime minister Steve Harper was in the gents while the official photograph was taken. Hahaha

12:52 GMT: Mark Bailey, from the comments, in response to my mention of news of a further meeting:

The second summit will probably be what was going to be the Sardinian G8: check out Andrew Rawnsley’s funny evocation of probable Berlusconian irritation about being upstaged: http://www.guardian.co.uk/commentisfree/2009/mar/29/gordon-brown-g20-andrew-rawnsley

12:46 GMT: For the sake of my personal safety, I just want to clarify that I think that’s a bad thing…

12:42 GMT: Just been looking at the official photograph and was struck by something: the 29 most powerful people in the world and only two are women!  I don’t want to make too big a deal out out of this, but even so!

12:33 GMT: As of now, this is what’s on the respective news channels – CNN: coverage of G20. Sky news: coverage of G20. Bloomberg: Coverage of G20. Euronews: Coverage of G20. NBC: coverage of G20. BBC: Coverage of G20. CNBC: Coverage of G20

Fox news?: Coverage of a baby deer coming out of a cat flap, under the heading of “Things we like”…

Says it all, really, doesn’t it?

1231 GMT:   While I was ranting about the police, the BBC were interviewing British Chancellor Alistair Darling who seemed pretty convinced that concrete action on tax havens was going to be agreed upon.

12:18 GMT: For more on the police’s tactics, see George Monbiot’s blog post in the Guardian. As you might expect from Monbiot, it’s a particularly devastating riposte. In particular he makes the great point that the police seem to create the violence they react to: in other words police violently entering a peaceful protest with riot gear suddenly find themselves with a riot on their hands

12:17 GMT: Let’s talk about the police for a moment. There’s no doubt that a small minority of protesters were acting up yesterday, for example the rather obviously choreographed smashing of the windows of a branch of the Royal Bank of Scotland. But the vast vast majority were just, you know, protesting – and yet all we seemed to see yesterday were riot police in their ridiculous armour, beating the living sh** out of anyone in front of them. There’s something genuinely scary when you see, in a supposedly democratic country like the UK, police in full, “I’m going to a medieval jousting session” riot gear wantonly whacking people with their shields and batons as a form of crowd control. Note to the police: a whack to the head with a potentially lethal object is not the equal and opposite reaction to a few taunts and a bit of shoving.

12:00 GMT: Just been watching the Fox News coverage, such as it is, of the G20 summit. As you might imagine it’s uniformly terrible, hopefully we’ll get some particulatly hilarious ignorant quotes later on.

11.47 GMT: FTSE 100 opens above 4000 following G20 optimism. Okay, so I get why this is technically good – optimistic markets are better than falling ones – but why do we focus so much on their daily upticks? As economist Dean Baker has pointed out, if a country today announced a massive tax hike for the poor or middle class, then that country’s markets would rally impressively, even though this policy would still be disastrous for their economy. In other words, the markets are not inherently sensible- they respond to what is good for bankers, not necessarily what is good for people. Can we stop obsessing over their ups and downs, please?

11.43 GMT: Reports coming through of an agreement in the draft to give $500 billion to the IMF. This is good news. Japan, in particular, is putting up around $100 billion. Go Japan!

11:40 GMT: BBC police source quoted earlier saying that the reason not that many protestors are out in force yet is because anarchists tend to get up pretty late in the afternoon. Boom boom! Surely, the anarchist would reply, this is merely a result of the state’s arbitrary working hours? No?

11:29 GMT: Some journalists are pointing out that there’s probably going to be a commitment in the finished agreement to meet again later in the year. This is good news – a commitment to meet in the near future will help make any summit promises seem more tangible and immediate – there’s nothing leaders like more than yet another summit to aim at. Also, note that a provision saying this is included in the supposed draft leaked to the Financial Times. (paragraph 24) Does this mean we get to do this all again? Go live-blog!

11.25 GMT: It’s worth reflecting for a moment that, though it’s good to see that we’re probably going to get strong, moral regulatory reform coming out of this summit, it’s nevertheless a massive shame that there probably won’t be any concrete commitments for an increased global stimulus. I touched on this in my post Fiddling while Rome Burns: Britain’s missing stimulus (in particular in the comments section of that post) but briefly, and at the risk of over-simplifying the arguments of  leading economists, here’s why the argument against more deficit spending is wrong: Europe – Germany in particular – is against more stimulus because they are worried about a) inflation and b) the cost of future debt incurred by big stimulus packages. a) is silly, however, because we are facing a deflationary environment rather than an inflationary one and while future inflation can be warded off, current deflation is much more dangerous (indeed, we actually need inflation in the short term – this is the point of many of the current monetary measures currently being put in place) b), meanwhile, doesn’t make sense because though an increase in goernemnt debt should always be of concern, it’s nowhere near as big a concern as an extended global downturn which is what may happen if sufficient fiscal stimuluses aren’t put in place . Basically European leaders have been suffering from long-termism: in other words, they’re ignoring short-term relief in order to focus on long term interests even though if they don’t look after their short term interests then they won’t get the chance to enjoy their long-term ones.

11.15 GMT: Over at the American Prospect, another good intro/summary article about the G20: How Obama should approach the G20

11:00 GMT: Lewis Hamilton should count himself lucky: the announcement that he will be stripped of last week’s third place in the Melbourne grand prix could not have come out on a better news day…

10:54 GMT: Gordon’s introductory remarks, lots of reference to paragraphs in the draft that all the leaders have in front of them. Emphasis on the paragraphs about protectionism, a real concern for Brown and one of the more controversial areas. This is a great time, by the way, to link to what is claimed to be a leaked draft of the summit’s agreement in the financial times. More on this  later…

10:49 GMT: Everyone now sat round an impressive table. Obama next to Brown. U.S. Treasury Secretary Tim Geithner to Obama’s right; Geithner has recently announced plans to regulate hedge funds that won’t be so dissimiliar from the plans in the summit today. He’s also announced controversial plans to give the american government power to take over any failing american financial institution. Geithner is very much leading the pack in terms of global regulation…

1038 GMT: UK business secretary Peter Mandelson’s comment that Gordon is being excessively ambitious – in a good way – is getting a suprising amount of play. Of course he is being ambitious! He’s expecting thirty world leaders to come to an agreement to fix the world’s economy and regulatory systems in just two days! The fact that this is probably going to happen is a real testament to his organisational abilities and his vision. He may be a doomed Prime Minister, but this is a real, monumental achievement – he will never in his life have another day like this.

10:34 GMT: Gordon Brown will be addressing the summit shortly. What a momentous moment for Britian’s prime minister…

10:32 GMT: World leaders gather for the official photograph… Angela Merkel wearing a very bright red dress. Um, not much else to say here…

10:26 GMT: Jamie Oliver’s meal for the world leaders at Downing Street last night came in, so he claims, at £12.50. Great…

10:22 GMT: A couple of good articles on what we can expect to come out of the summit: Will Hutton in the Observer last Sunday and a good introductory article from the Economist.

10:15 GMT: The BBC is reporting that there are rumours that a strict crackdown on executive pay will be announced. Meanwhile, the BBC’s business editior Robert Peston (who, by the way, is a pleasure to watch) is reitirating the things that aren’t quite agreed: decisions on trade, funding for the international monetary fund and exact numbers of aid to the poorer countries in crisis. Again, it’s worth emphasising that though many of the details have already been sorted out by finance ministers days ago, the exact numbers – and we’re talking billions here – have yet to be decided.

9:55 GMT: It’s worth pointing out how incredible it has been seeing around thirty of the world’s most powerful people hanging round together for two days – sometimes in the same room. For a great example of this, check out the video coverage of yesterday’s reception with the queen. (hat tip Mark Bailey) My favourite bit is when the camera focuses on German premier Angela Merkel chatting with the Queen of England while in the background you can hear US Secretary of State Hilary Clinton joking with French President Nicolas Sarkozy. Incredible…

9:41 GMT: Thousands of protestors are expected back in London today. Yesterday, 86 were arrested, 4 were charged and around 4,000 were brutally beaten by the batons of riot squads. (that last figure’s more of a rough estimate)

9: 37 GMT: Short version of what I’ve been saying over the past few minutes: Draft agreement written weeks ago. Boring! But potential for lots of last minute changes… Exciting!

9:29 GMT: Media fiction: France and germany are going head to head with Britain and the US! Merkel and Sarkozy don’t want a global fiscal stimulus, while Brown and Obama are worried about the extent of Europe’s regulatory demands! Who will win? We just don’t know! Will Sarkozy walk out? Will Gordon get his stimulus? Who knows!!!

Reality: Most of the details have already been prepared. Everyone’s in tandem on most of the regulatory reforms, while the global fiscal stimulus stopped being a possibility weeks ago – France and Germany have won that argument, though we might get a vague agreement on some kind of stimulus. But on everything else, everyone’s in tandem.

That’s not to say that there aren’t still issues of contention. The main things that still need to be hammered out include the somewhat controversial details of any plans re. tax havens and how much to give to the IMF. But in general, the framework is already in place.  See BBC economics editor Stephanie Flanders’ excellent post for more.

9:11 GMT:   The BBC’s business editor Robert Peston has a couple of great posts up on his blog about travelling to the summit this morning and the sheer scale of the summit’s interior. He also makes the great, albeit rather grumpy, point that Sarkozy helped Gordon Brown immensely yesterday in the sense that his concerns made it look like everything hasn’t been agreed to, even though it, uh, has. Having said that, there are still some potential disagreements to be ironed out but it cannot be emphasied enough that the agreement is mostly in place already.

9:00 GMT: By the way, feel free to leave your comments on this live-blogging thread, especially if you think at any point I’m talking rubbish (which, given the marathon nature of this live-blogging session, is very probable)

8:54 GMT: Here’s a quick look at the likely substance of any agreement made today, bearing in mind that, despite what the media likes to claim, most of it has generally been agreed – though there a few minor disagreements to be sorted out and details to be finalised, the skeleton framework is essentially in place.  I’ll be looking at these in greater detail throughout the day:

1) A massive boost to the International Monetary Fund’s budget, the exact amount to be agreed (think $500 billion) 2) An agreement to provide aid to the those ailing, poor economies that need emergency rescues – think Eastern Europe 3) Agreements on trade, in particular a conviction to steer away from protectionism 4) Bringing shadowy tax havens into the sunlight 5) A regulatory system for hedge funds and any other financial institutions that need closer regulation 6) Some kind of proper trading market for the kind of deadly financial instruments that helped to exacerbate the crisis (think credit default swaps) 7) An agreement to reform the bonus/compensation culture 8) A global regulatory system to monitor the big banks, control systemic risk and ensure they don’t start doing stupid stuff again 9) New regulation for  stricter leverage and capital requirements for banks, along with a better ratings system for financial products 10) A vague commitment to some kind of potential, perhaps, for some kind of agreement to put in place, maybe, some manner of  global fiscal stimulus, at some point in the indeterminate future. (Me? Skeptical? Never!)

8:35 GMT: Just been looking at last night’s seating plan (see below); lest you should think that not much thought went into it, bear in mind that Gordon Brown was sat next to the Chinese premier (keeper of the world’s debt) and the king of Saudi Arabia (keeper of the world’s oil). Also, surely no coincidence that Obama was sat next to German premier Angela Merkel – Obama perhaps was laying out the case for a global stimulus to a skeptical Merkel. I’m sure you can find some more logic to the seating…

8.33 GMT: Sarkozy just arrived and as usual looks like the most entertaining guy in the building…

8:30 GMT: Quote of yesterday? Gordon Brown citing the President of Brazil, Luiz Inacio Lula da Silva: “‘When I was leader of the trade unions, I blamed the government, when I became leader of the opposition, I blamed the government, when I became the government, I blamed Europe and America.” In other words, it’s a global problem, stupid…

7:56 GMT: By the way, if anyone was wondering what the seating plan was like for the Downing Street dinner for the world leaders last night, then take a look for yourself. Fascinating stuff…

741: GMT: World leaders arriving at Londond’s dockland, where the talks will take place… and here is Barack Obama, in the ridiculously large armoured monster known as “The Beast”…

7: 33 GMT: Hello! Welcome to Entangled Alliances’ live-blogging of the G20 Summit, at the ridiculously early time of 7.30 am. Today should be very exciting; we should hopefully be seeing nothing less than an agreed framework for a complete renovation in the global regulatory system. Either that or a Nicolas Sarkozy walk-out. Either way, things should be interesting and we’ll be there every step of the way… (well, through the medium of television and the internet. We won’t literally be there. Sadly…) Unless otherwise stated by the way, this is Edward live-blogging.

photo credit: Today is a good day

“The world should consider adopting the Nordic approach to capitalism and learn from the region’s response to its financial and economic crisis in the 1990s in the attempt to stave off recession, according to the chairman of two of Europe’s biggest companies.

Jorma Ollila, chairman of Nokia, the mobile phone maker, and oil major Royal Dutch Shell, said the Nordic style of capitalism was characterised by openness to globalisation balanced by strong government programmes to protect people from its excesses and an egalitarian education system.”

I’m a huge fan of the nordic model for Government, economics and to some extent even society.  The Scandinavian economies and even their welfare system have proved remakrably resilient in recent years, despite being targets for right-wing attacks (particulalrly in the US) and bizarrely O’Reilly feels Sweden is a nightmare communist state.

They’ve shown that globalisation need not be a negative as long as the state acts as a levelling tool, of course such engineering would be far harder in more economically diverse countries such as the UK and France, but in principles the direction is a positive one.

photo credit: JFabra

If you Read Ed’s article on the need for stimulus packages in Europe you may have come across a debate Ed and I had over the nature and merits of a stimulus. Regardless of which side you fell on, there were further issues at stake than just economics. Economists like to see their subject as a science: numerical and evidence based, rational and objective. No doubt,  many of their research tools are scientific but economics is also the backbone of the modern world and often not an end in itself, more a vehicle for achieving other ends.

As James Surowiecki argues in the Financial Page of the New Yorker, economics is by no means a science and as the recession draws on, we’re able to examine the cultural memories that can and do direct economic courses of action. From recessions and inflations, each country will have its own preferences and fears that alter the importance attached to different parts of the economy.

In the US, the focus has fallen on the stimulus package and Paul Krugman has made the case that europe should follow suite. He makes a convincing case for a European stimulus package, but is it correct to lampoon European economic policy and decision making as woefully inadequate or to equate US economic policy so readily with Europe? Well in some sense yes, it’ s perfectly fair, the rationale for the stimulus is not so difficult,  it could even lead to greater gains if correctly invested in infrastructure which could grow economies in the future, from transport to broadband aswell as tiding Europe over during a recession. In fact, many economists, (despite what many think) advocate deficit spending. They argue that if done correctly it will more than pay itself back through the higher tax-receipts of the economic growth it will yield.

But Krugman’s argument fails to take into account complexities within Europe, not just over the method of recovery but the acceptable limits . Surowiecki’s argument makes clear the perils of inflation in cultural memory and ought to be taken seriously:

If the episode that haunts the U.S. is the Great Depression, in Europe, where the Germans have been dominant in shaping economic policy, the defining historical moment is the hyperinflation of Weimar Germany, when prices rose more than seventy-five billion per cent in just one year, 1923, and, in the words of Walter Benjamin, “trust, calm, and health” vanished

The US has never sufferred the acute inflationary issues several European countries and notably developing countries have suffered, but it has suffered unemployment.  Europe on the other hand has had its fair share of both, such as Weimar Germany.  Inflation is not simply a historical boogeyman, Hungary and Yugoslavia , Argentina and Chile in the 70s and 80s and Zimbabwe to this present day have  allsuffered the terrible impact of inflation, collapsing economies as easily if not more so than high unemployment.

Within Europe, unemployment is also less of a concern than the US.  Europe an countries have lower unemployment rates and greater safety nets, which act as stabilisers against recession. European states can and will try to sweat out the recession by letting the welfare states take the strain. Furthermore, Europe knows that the US and China have to get themselves going, China has been candid before about its need to maintain  high growth rates to appease ever-growing expectations among its population and the US similarly has high expectation, if these key markets take the strain Europe could ride on their coat tails. They will probably recover more slowly, miss an oppurtunity to re-vamp their economies for new challenges, but European countries have in the past demonstrated their willingness to take the backseat, if it means avoiding the riskier decisions.

US capitalists would look in horror at the idea that European states would happily accept higher levels of unemployment and the subsequent welfare costs, and forego economic growth in return for stability.  But a turbulent history of left-right battles  recurrent thrroughout the 20th century, continuing after Post-War into the radical conflicts of the 60s have made the European centre right more concilillatory, in order to maintain stability. In Germany for example, the importance of left-right pacts that the CDU has fostered since the days of West Germany, to keep the left and the right firmly in check and the bargaining parties as the power-brokers, not the fringe parties.

Krugman’s views shouldn’t be taken out of context, as an American he can’t be immune from the feeling they are taking more than their fair share of the burden.  Surowiecki’s argument is that the US is paying for the luxury of a rapid recovery through stimulus, with the bonus of being able to re-shape significant parts of the economy such as green energy investment to prepare the economy for a low-carbon future, rather than endure a longer recession and a slow recovery. Surowiecki’s argument underestimates the importance of a stimulus to the US, lengths of recessions are not “luxuries” but he’s right in some sense that there is a cultural value being attached to the economy as whole, particularly when Americans lack the European safety nets.

By comparison , Europeans have less to lose from economic growth, much of this is the welfare state, unemployment is not the devastating force it can be to many in the US. A more relaxed attitude to growth may also be a way of compensating for Europe’s inability to compete with the US economically, or a disregard for trickle down economics but I suspect it’s also rooted in the history of post-war Europe, as the battle ground of the Cold War. With the spectre of communism on the one side and the rising power of US capitalism on the other, Europeans were caught internally and externally between competing views of progress and settled, broadly, for variations on social democracy, a comfortable less exciting middle ground, less growth, more stability.

Nevertheless, using culture and history doens’t mask other problems facing Europe. Germany undoubtedly has its reasons for not backing a stimulus as do other European countries. Some, might find it politically unpalatable, many Europeans blame the “Anglo-Saxon” economic system, and are not in quite the dire straits the US and the UK, no wonder Brown is the loudest for a stimulus when the UK is already mired in debt and less able to help itself. But Krugman is right, when before he’s recognised that European institutions have been slow and incapable of decisive action, even if they’d want to do so . Europe finds itself in the position of having an integrated market without integrated institutions to support it which this recession  has exposed cruelly.

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