News

Their vision: World economic summit

The idea is ambitious: World leaders joined by aides to the new U.S. president-elect would gather before the year's end in New York and attempt to forge a new vision for the global economy.

French President Nicolas Sarkozy has teamed with British Prime Minister Gordon Brown to press for such a summit, and the French leader will travel to Camp David this weekend to lobby President Bush to sign on.

Brown, buoyed by the praise he won for engineering a British bank bailout that inspired U.S. and European rescues, is proposing “radical changes” to the global capitalist system, including a cross-border mechanism to monitor the world's 30 biggest financial institutions. Sarkozy has floated the idea of reforming rating agencies and even exploring the future of currency systems.

Details remain vague and the obstacles are many.

But the political pendulum, at least in Europe, is swinging decisively in the direction of tighter control and supervision, away from the laissez-faire economics that fueled a colossal global boom and appear to have enabled an equally dramatic bust.

In Brown's view, what's needed is nothing less than a new version of the 1944 Bretton Woods conference that brought together Allied leaders and established a post-World War II global monetary and financial order, laying foundations for the International Monetary Fund and a currency exchange regime that lasted for three decades.

Brown and Sarkozy have proved instrumental in the past two weeks in corralling European governments to dig deep into taxpayers' pockets to shore up banks, unfreeze credit, and soothe markets.

But experts wonder whether leaders at the proposed summit would be able to set aside national interests and clashing legal and business cultures to agree on a common vision. It may mean that countries would be forced to sacrifice autonomy and economic growth under tighter regulatory shackles.

  Comments