Merkel presents G-8 plans

On Thursday, German Chancellor Angela Merkel presented her policy statement for the upcoming G-8 summit in Italy. Government and state heads of the top seven industrialized nations, the United States, Germany, Great Britain, Italy, France, Japan, and Canada, plus Russia are to meet from July 8 to July 10th.

"Not back to business as usual"

"The G-8 summit will be held against the backdrop of the largest global financial crisis since the 1920s," Merkel stated at the opening of her address to parliament.

Germany has to date invested 80 billion euros in stabilising the country's banking and business sectors in one of the world's largest economic stimulus packages.

"We can clearly say that we have done our part in fighting this crisis," she said, earning applause from parliamentarians.

At the G-8 in Italy, Merkel said, Germany will push for global financial market regulations. She said that while the US and the EU have made progress in developing national and regional regulations, it is up to the seven leading industrial countries, working together with the rapidly developing countries, to agree on international standards to rein in the global crisis.

"At the G-8 in Heiligendamm in 2007, the G-8 was not willing to go along with our suggestions to regulate hedge funds. Less than two years later we can see what a huge mistake that was," she admonished.

But she also said Germany’s representatives were pushing for sustainable policies, implicitly criticizing countries like the United States who have been running up high national debt to stabilize their economies. She said that Germany would "have its eye" on protectionist tendencies, and fight for the completion of the Doha world trade talks.

"Leading and encouraging debate on climate change"

Climate change is to be second on the agenda at the G-8 summit in L’Aquila, a region that was devastated by earthquakes just months ago.

The environmental impact of global warming was first brought to the G-8 table at the 2007 German-led summit in Heiligendamm. Merkel said that the turnaround in US climate policy under President Barack Obama was encouraging, but that Germany would continue to drive the debate.

"In Heiligendamm we were happy to have signed an agreement that the industrialised countries would 'seriously consider reducing their greenhouse gas emissions by 2050'," she said, stating that she had higher hopes for this year's meeting. "This year we want to get a pledge to reduce global warming by two degrees."

Merkel said that getting rapidly developing countries like China and Brazil on board was key.

"Even if we (the industrialized nations) reduce our emissions by 100 percent, we wouldn’t be able to reach the two degree goal without them."

Group of Eight focus shift to Group of 20

This follows a more general tendency, Merkel said, to shift the importance of the Group of Eight meeting. This year, for the first time, the G-8 will only spend the first day of their three-day summit alone. On Thursday, they will come together with state and government leaders from rapidly developing countries of China, India Brazil, Mexico and South Africa.

"In the future, I think the Group of Eight summit will be – and should be – less important than the G-20," Merkel said. She said that important decisions should be made in the larger group.

"The challenges we face are global, and this will be a telling year as to whether we, as politicians, can work together on an international level to combat them."

The next Group of 20 meeting is scheduled to be held in Pittsburgh, Pennsylvania in the United States in September.

Other topics on the G-8 agenda include international security issues, the crisis in Iran and finding a solution for the situation in the Middle East.

On Friday, the G-8 meeting is also to include representatives from Africa to discuss development policies. Merkel said that Germany would not be reducing its development aid.

Silence speaks louder than words

Merkel's speech was sprinkled with applause from parliament, but following her final policy statement in this legislative term, Merkel was rebuked by opposition parties.

With regards to the global financial crisis, Guido Westerwelle, head of the liberal Free Democratic Party, began by commenting on the points Merkel had failed to mention.

"We believe that we need an international financial regulatory board. But how can you fight for common international regulations, when you have been unable to establish national guidelines?" he asked.

Westerwelle also criticized the chancellor for lack of specifics regarding the instruments needed to reduce carbon emissions. He said that Germany should follow suit with the rest of the Group of Eight countries to reinstate nuclear power as part of the energy mix.

Left party leader Oscar LaFontaine also criticized Merkel for not giving concrete examples of how she hoped to regulate financial markets and overcome the credit crises. He demanded that governments do more to regulate the banking system.

Author: Kateri Jochum
Editor: Chuck Penfold