The global crisis and a new world order

The G20 meeting is unlikely to produce a ‘grand bargain' to rescue the world economy, but will begin to reshape global politics.

For Europe, the present order is fading fast and the old road is rapidly ageing. Time, as Bob Dylan put it, to get out of the way of those building the new road, “for the times they are a-changing”.

The collapse of communism in 1989 signalled the emergence of a new order in the balance of international power also dominated by Washington. Only 20 years later, the first truly global economic crisis in history is re-shaping that post-communist order, too. Today's (2 April) meeting in London of the leaders of the G20 most influential advanced and emerging market economies begins to lay the foundations for the new governance structures that this brave new world will need.

Despite earlier pre-summit hype, there will, however, be no ‘grand bargains' on how to rescue the global economy from an even deeper recession than the one that the International Monetary Fund (IMF) is already predicting. There will be no ‘new Bretton Woods', the misguided slogan dreamed up by a hubristic Gordon Brown, the UK prime minister, and echoed by Nicolas Sarkozy, France's president, which raised unreal expectations about the London summit that are now being doused under the ice-cold waters of political necessity.

The scrupulously prepared 1944 Bretton Woods conference was utterly dominated by the victors of the Second World War, the UK and the US. It did indeed rewrite the rules of global monetary governance, but on the victors' terms. Only a nanosecond's intelligent thought is required to see that what is happening in London this week is totally different. More

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