We know what the EU’s leaders want out of April’s meeting of the G-20 in London: lots of regulations to tie down Britain and the U.S. And we have a pretty good sense of what the outcome of the meeting will be: the Europeans will get what they want, and will throw a bone of a token approval of so-called fiscal stimulus to the U.S. But now we know what the Russians want. It almost makes the Europeans look modest.
The Russians unveiled their proposals yesterday, after a meeting with EU officials. They didn’t meet with the Americans. Given what they have in mind, you can understand why. Naturally, the Russians want a new framework of global regulations – SURF, short for Standard Universal Regulatory Framework. But the real biggie is their other major demand:
the introduction of a supranational reserve currency, to be issued by international financial institutions
That means the end of the dollar as a major international currency, and its replacement by a fiat currency to be issued not by national governments, but by the global regulator. In short, the Russians are approaching the G-20 summit with the explicit goal not of addressing the global financial crisis, but of kicking the U.S. off the top of the international financial and political order. Not surprisingly, this appears to have gone over quite well with the EU: the Russian spokesman on Wednesday reported that “Our positions are very similar on most of the topics.”
Frankly, there’s not much likelihood that the Russians will get what they want, as least as far as the dollar is concerned. Right now, foreigners want to buy dollars, not sell them, and any concerted attack on the dollar would be extremely unpopular with nations like China, with its enormous holdings in dollar-denominated debt.
But the Russian proposals are revealing nonetheless, because they point out a simple, all too often neglected fact of international politics. The U.S., like Britain, is a problem-solving nation. Americans disagree – vehemently – about how precisely to go about solving problems, but they do believe that problems exist to be solved. But most of the G-20’s members – never mind the rest of the world – don’t work that way. For them, a crisis is not a crisis: it’s an opportunity to make gains at the expense of someone else. And since the U.S. gullibly believes that everyone’s on the same page, those gains usually come at its expense. Let’s hope the U.S. refuses to play the patsy in London.
