Sozialalmanach - Caritas Luxembourg

despite its successes, the G20 has problems. It is not clear why these 20 specific countries were
appointed to represent the world. From a social justice perspective as well, G20 insufficiently
represents the poorest countries. One way of rationalising these arrangements would be
by moving to a Group of 24, based on representation in the International Monetary and
Financial Committee of the IMF. Of the twenty-four representatives in this committee,
five represent individual countries, whereas the others represent groups of countries. All
this makes it a far more effective structure to supersede the G20. Another shortcoming
of the organisation is Europe’s inability to speak with one voice. The EU should come to
recognise that two seats – one for the euro area and one for the rest of the EU – is sufficient.
This would streamline decision-making, both within the G20 and the IMF, while freeing
up seats at the table for currently underrepresented developing economies and regions.
A final geopolitical international challenge is that this economic crisis coincides with
a major environmental crisis, whose solution requires a complete transformation of our
modes of production and ways of living. Regardless of the institutional changes following
the crisis, the imperative to act on issues such as climate change, energy insecurity, and
water scarcity will remain paramount 43 . Climate change policies can play an important role
in revitalising economic growth. Averting climate change should be an important policy
goal when prioritising stimulus spending. Investments should go towards clean energy and
the adaptation of green technologies should be given prominence. Thanks to the crisis,
substantive global issues, such as climate control, water management, renewable energy, and
other long-term concerns of sustainable development are now high on the world political
agenda. This is a welcome correction.
The crisis has affected different economies differently, as a result of their relative vulnerability
to endogenous and external economic shocks and also because of the differing
institutional capacities they were able to mobilise to address the economic duress. The
smaller economies of Western Europe, which have been unable or unwilling to muster fiscal
stimulus packages on par with those of Germany and France – for example Belgium, the
Netherlands, and Sweden – are behind the curve of recovery. Ballooning budget deficits in
Ireland, Greece, and Spain raise severe doubts about recovery. In August 2009, the Bank
of England surprised everybody with another round of quantitative easing of 50 billion
British pounds, admitting that the recession appears to have been deeper than previously
thought. Many of the new member states of Eastern and Central Europe have been
disproportionately damaged by the crisis. Wade Jacoby 44 argued that former communist
countries made the transition to the market economy at the height of the neo-liberal era,
43 Giddens (2009).
44 Jacoby (2002).
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