G20 Sherpa meeting: Some nations pull up G7 over global banking crisis

The concluding day of the meeting of Sherpas, who act as envoys of G20 heads of states, saw a session on the global macro-economic situation, where the financial crisis and its impact were discussed

Till early March, the Group of Seven nations (G7) were criticizing Russia for its invasion of Ukraine at various Group of Twenty meetings being held in India. Now, at the G20 Sherpa meeting in Kumarakom, Kerala, some countries held the G7 nations, especially the United States, responsible for the latest financial crisis and bank failures to hit the global markets.

The concluding day of the meeting of Sherpas, who act as envoys of the G20 heads of states, saw a session on the global macro-economic situation, where the financial crisis and its impact was also discussed, including the failure of Signature Bank and Silicon Valley Bank, and the takeover of Credit Suisse by UBS to prevent the former from going under.

“Some of the nations did pull up US and Europe over the banking crisis, as part of the discussions. Whether they said it for political reasons, genuine concern or a combination of both is anyone’s guess,” said a senior Indian government official on the sidelines of the meeting. The person declined to name the countries which blamed the US for the financial crisis as the discussions were held in a closed-door setting.

“Pandemic has had a huge hit on the fiscal situation because of Covid-related expenditure. There has been an increase rather than a decrease in fossil fuel consumption, there is a cost of living crisis due to inflation in fuel, food and industrial products. There have also been disruptions due to monetary policy actions to bring down the high inflation,” said India’s G20 Sherpa Amitabh Kant at a media briefing after the conclusion of Sherpa’s Meet, when asked what was discussed on the global economy.

In the crucial morning session, which dealt with bringing together deliverables of the various G20 working groups and started negotiations on the language of the Leader’s Statement due in September, there was a clear indication by all members, including the warring factions of G7 and Russia-China, that they all want India’s Presidency to succeed and that there should be complete consensus on the Leaders’ Statement.

“There is a clear commitment that the Indian Presidency should succeed. We want G20 to speak in one voice echoed by all,” said Kant. “We are working out different options, and I can assure you we will leave nothing to chance. But what is not in our hands, is not in our hands. We have different strategies to bring consensus among all the members,” Kant said.

The first official quoted above said that generally there is consensus among all nations to move ahead on setting up the shape of the Leaders Statement. “Work on drafting the statement will begin a couple of months before the G20 Leaders Summit, as the global situation could change from now till then,” said the official.