Silvio Berlusconi Hits Back at Criticism Over G8 Summit

Silvio Berlusconi (pictured left) has attempted to fend off allegations that preparations for the G8 summit have been so chaotic that Italy's membership of the group was being called into question. The Italian prime minister said a report in the Guardian, citing senior western officials as saying the US had taken the lead in managing the agenda for the summit, was "a colossal blunder by a small newspaper". Officials from G8 countries, who did not want to be named, told the Guardian that in the absence of Italian initiatives for the summit, Washington had arranged conference calls among the "sherpas" – the diplomats preparing the summit. There was also fierce criticism of Italy's failure to deliver on promises of overseas aid. The Guardian today issued a statement saying it wholeheartedly rejected any suggestion that the news story was unfounded. – UK Guardian

Dominant Social Theme: It's Silvio's fault.

Free-Market Analysis: The fuss over the G8 summit has to do in part with an article in the UK Guardian which suggested that there was a consensus that Italy ought to be kicked out of the G8 for not handling the current summit properly. The complaints in no particular order were that Italy didn't seem to have any idea what the summit was to be about; that Italy did not properly follow through on G8 commitments; and that Berlusconi had scheduled the summit in a live earthquake zone.

Apparently, at least some of these comments struck a nerve. The Berlusconi administration has defended itself (see above excerpt) claiming that it did not need outside help to create the G8's agenda, and that Italy was a G8 member in good standing. The Guardian also suggested that Italy be removed from the G8 and that Spain be allowed to take its place, something else that seems to have infuriated Berlusconi.

In fact, the G8s, the G20s and other various international meetings are often gatherings in search of an agenda. And given that the G8 seems destined to be replaced by the G20, or something in between, this political tempest may seem a bit overblown. But it does provide an idea of how tempers are flaring and how much stress international participants are under currently.

There is increasing pressure from the US and rising powers such as China, India and Brazil for the G8 "rich countries club" to be expanded and for European membership to be consolidated. Bruce Jones, a senior fellow of the Brookings Institution in Washington, said in the next three years European states would come under pressure to decide among themselves who should represent the EU in the G8 or any larger successor group, as well as in the UN security council and the International Monetary Fund. All three institutions are due to be reformed to make them more representative of the 21st-century balance of power, and that is likely to bring a dilution of European influence, with some countries having to drop out. "There is already frustration with the Europeans that they have not sorted these things out," Jones said.

Conclusion: The authority generated by these international get-togethers has much to do with their perceived success and influence. When the West is awash in wealth then these global confabs bask in the reflected glory of the boom times. But during a bust, participants must be seen as generating solutions that work. The trouble is they likely cannot. They are talk shops that really cannot do much to move the global economy. Thus the longer the crisis continues, the more their prestige and power begins to leak away. If the current economic crisis does not get much better over the next year or two these meetings will begin to seem entirely redundant. By then gold and silver may be well on their way to much higher levels, which will pose even more problems for the monetary elite.

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