G20 should be main forum for global economic governance

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

“The G8 has been more and more eclipsed by the G20,” which should now become the main forum for global economic governance, argues Eberhard Rhein, a lecturer on economic policy at the Malta-based Mediterranean Academy for Diplomatic Studies, in a post on Blogactiv.

The G20, comprising the US, Canada, Mexico, Brazil, Argentina, the EU, France, Germany, Italy, UK, Turkey, Russia, South Africa, Saudi Arabia, India, China, Indonesia, Japan, South Korea and Australia, “represent some 75 percent of the global population” and almost 90 percent of global GDP, he says. 

Furthermore, the group includes both wealthy and developing countries and a mixture of democratically-elected ministers and autocratic leaders, which makes it “a balanced mix of today’s world,” according to the blogger. 

Their economic weight, expertise in global issues and the number of people they represent gives the G20 members “economic clout,” remarks Rhein, arguing that “what they decide has a bearing for the international community, even if their decisions do not bind the 175-odd other countries”. 

In view of this, “the time has come for the G20 to take over from the G8,” Rhein believes. He claims “there is no room for two summits every year, one grouping the wealthy industrial countries and another encompassing all the key players in tomorrow’s global economy”. 

Moreover, Rhein believes the G20 can have a “decisive influence on the world economy” as well as “build mutual confidence and prevent tensions and conflicts”. But any decisions would have to be taken by “consensus,” he admits. 

The rise of the G20, he argues, should be accompanied by two subsequent changes in global governance: 

  • The Organisation for Economic Cooperation and Development and the International Energy Agency should expand their membership to all G20 member countries, and; 
  • the EU should not take five seats (EU, France, Germany, Italy, UK) in the G20, but only one, to be shared between the presidency of the European Council and the European Commission. 

Considering the bloc’s demographic and economic weight in the world relative to the other members, Rhein maintains that “it can simply not claim five of the twenty G20 seats”. 

“The sooner the EU adjusts to the shifting realities at global level, the better,” Rhein concludes, because doing so would “put an end to internal jealousies about proper representation and open the way for third country contenders to join the G20 in due time”. 

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