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The Risk Telescope — Delhi, Copenhagen & DC

Fri, 30 Mar 2012 15:53:58 GMT

On opposite sides of the world in the last 24 hours global leaders laid out their respective visions for the trajectory of global economic policy.  Leaders from Brazil, Russia, India, China and South Africa met in New Delhi yesterday and issued the “Delhi Declaration.”  EU and eurozone leaders (and their finance ministers) met in Copenhagen, and Eurozone leaders issued a statement today.  In between, physically and philosophically, sit the International Monetary Fund (IMF) and the United States.  Last week, the two key U.S. policymakers responsible for IMF and G-20 leadership at the ministerial level (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) provided testimony to the U.S. House of Representatives last week.  Their respective views establish the foundation for next month’s meetings of the IMF Board and G20 ministers.

Today’s issue of The Risk Telescope analyzes the Delhi and Copenhagen outcomes.  It highlights the subtle but important differences of approach and vision between the BRICS and the European Union that go far beyond the cosmetic issue of which country gets to nominate an individual to lead the World Bank or the IMF.  It also highlights how emerging views inside the IMF seem to be supporting one view or the other.

Section I summarizes the policy environment within which policymakers met in the respective cities of New Delhi, Copenhagen and Washington DC.  Section II focuses on key issues considered by the three major policymaking sessions: macroeconomic policy; eurozone sovereign debt resolution; and IMF governance reform/evolution.  Section III concludes.  Overall, it is difficult to avoid concluding that centrifugal forces at the global level continue to accelerate.  Policymakers in the three large blocks analyzed in today’s publication increasingly seem to be talking past each other rather than crafting a foundation for global compromise.


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