G20 meetings always get a lot of ink, and in a sense, it's easy to see why: having Barack Obama, Angela Merkel, Hu Jintao, and other international political heavyweights in a room together demands attention, especially when they're focusing on the never-ending euro crisis, as they are at this week's G20 summit in Los Cabos, Mexico. Then again, ramping up the pressure on Europe (as if there weren't enough pressure already) to solve its problems may accomplish little. In fact, the G20's ability to solve problems may be diminishing.
"Other than making all the requisite noises, I don't think the G20 will do anything more than reinforce the Europeans to really ramp up their crisis management," says Scheherazade Rehman, director of the European Union Research Center at George Washington University. "I think that you can expect very little in terms of anything grand or brand new, unless they sit down and reconsider seriously a new world order to tackle the financial crisis. And I doubt that's going to happen."
Several factors may contribute to that lack of action. In part, it's a question of timing, notes James Haley, director of the global economy program at the Centre for International Governance Innovation, an Ontario-based think tank. "[There is] understandable reluctance of the Europeans to actually commit to do anything in Los Cabos, particularly when there is a European summit planned for the 28th and 29th [of June]."
Aside from timing, there is the simple fact that while the euro crisis' impacts are global, the politics are much more local.
"If you go to Los Cabos, every country there outside of Europe will say, 'Look: we have a legitimate interest in how you, the Europeans, resolve this crisis, and we want to see action,'" says Haley. "On the other hand, Europeans are going to arrive in Los Cabos and say, 'It's an internal European issue that we will work on in Europe.'"
All of which raises the question of what, exactly, the G20 can do to nudge things along. The forum was created in response to Asian financial crisis of the late '90s, but it became much more prominent in 2008, when economies from around the world came together to fight the global economic crisis. Those meetings were instrumental in coordinating countries' crisis responses, says Haley.
As that crisis recedes, it appears that G20 summits are seeing diminishing results.
"That was because there was a common threat [in 2008 and 2009]," says Haley.
Now, the world faces many smaller problems that are often more nation-specific. So while Europe may loom largest on the global stage, other threats—slowing Asian economies, a fast-approaching "fiscal cliff" in the U.S.—also take up participants' mental energy.
"After the immediate aftermath of the crisis, each summit tends to—I wouldn't say 'lose relevance,' but it tends to fail a little bit more after each summit," says Martin Schwerdtfeger, senior economist at TD Economics. "The expectation to actually see tangible results come out of the G20 ... has been diluted."
So what is there to gain from this week's meeting? One key development will be in the amount that different countries contribute to the International Monetary Fund, a key player in recent European bailouts. Several countries, including China and other emerging economies, are expected to announce in Los Cabos how much they will contribute to IMF coffers. A bolstered IMF could calm fears about further turmoil, particularly in Europe.
Aside from that, Haley, Rehman, and Schwerdtfeger all point out that there is great value, albeit unquantifiable, in world leaders simply meeting face-to-face.
"It's good to have a forum in which leaders could get together, and even if they do not accomplish much at each of these gatherings, it is good that these gatherings ... keep the channels fluid," says Schwerdtfeger.