«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»
The experience of the EU in this respect is illuminating. Its highly institutionalized structures often prove outdated and slow to intervene in times of crisis like the ongoing sovereign debt crisis. In such cases, in parallel with relevant Union initiatives, EU Member States seem to turn as a default mode to intergovernmental processes of negotiation and decision-making in order to react in a timely and decisive manner. This tendency underlined the initial creation of the European Council back in the 1970s and may be safely said that it is even more prevalent at present. The particular example of the December 2011 European Council summit actually illustrates that European leaders are determined to go even further outside institutionalized forms of governance in order to achieve significant political goals. Thus a hypothetical institutionalization of the G20 would quickly be outdated by the inherently volatile nature of global power balances and economic needs. Then, judging from the example of the European Council, its members would have to revert to a more flexible coordination mechanism eventually putting into question the relevance of the G20 as a global forum of economic governance.
Nonetheless, the leaders of the G20 recognised that it ‘must remain efficient, transparent and accountable’ if it is to continue responding to global economic challenges (‘Cannes Summit Final Declaration’, 2011, paragraph 92). In order to better serve the first two of these goals they decided the institutionalization of specific aspects of the functioning of the G20. It was therefore agreed to formalise the Troika and to ask the ‘Sherpas to develop working practices for the G20’. Multi-level engagement in a reciprocal manner with non-members, such as regional and international organizations as well as civil society has also been found to serve efficiency and transparency, as had already been underlined in the Cameron report (Cameron, 2011, pp.12–13). On the contrary, the Presidency will continue to rotate every year among different regional groups consisting of members of the G20 (‘Cannes Summit Final Declaration’, 2011, paragraph 92–94). However, the issue of accountability was at the very least marginally, if at all, tackled by the G20 Summit. The underlying reason for that is the fact that ‘political accountability is essentially national.’ (Cameron, 2011, p.10).
Accountability on the international level can only be understood as peer review and peer pressure among states and only secondarily as control by civil society on governments. G20 leaders apparently acknowledge this and abstained from attempting to somehow remedying it.
These decisions bear a major resemblance to the early stages of the development of the European Council. Indeed, members of the G20 opted for a flexible, informal forum that forms part of the international economic governance architecture although it avoids getting entangled in legally binding agreements that may impede the process of political negotiations and compromises necessary for the successful steering of global economy. As with the European Council, G20 leaders are results-oriented in that they decided to institutionalize their cooperation only to the point that this will become more effective. One glaring difference with the European Council lies in the fact that the G20 is much more open to non-members. This can easily be explained by the fact that in the case of the European The G20 and Global Economic Governance: Lessons from Multilevel European Governance?
Council all affected states have a say in the decision-making process whereas the Union structures are available to offer expertise input to the negotiations and subsequently implement the decisions of the political organ. By contrast, the G20 includes in its decision-making process only a number of the affected states whereas it needs the IFIs and other international organizations to realise its decisions.
The G20 has emerged in recent years as the indisputable steering committee of the international economic system. As an informal intergovernmental forum where leaders of the most powerful states exchange their views and endeavour to reach compromises on the appropriate direction of global economy, it follows political imperatives rather than legal rules. Therefore its longevity depends on its continued successful guidance of the global economy. The question that we tried to address in this article concerns the expediency of institutionalising the G20 in its role as ‘global economic governance executive’ grounded in the experience of European multilevel economic governance. Our analysis has illustrated the deficiencies of the European system despite its 60 years of development.
There are no clear institutional borders and deep multilevel partnership is still lacking. The institutionalization of the EU structures often leads to a rigid outcome that prevents the EU from foreseeing international developments or at least reacting to them in a timely manner. The European Council with its particular intergovernmental characteristics offers some more insights to our discussion. The latter’s institutionalization and integration into the institutional framework of the EU has only come very gradually and, most importantly, has not deprived it of its political character. In other words, the European Council has seen its functions institutionalized within the EU in a step-bystep procedure with the aim of maintaining its qualitative advantages in relation to supranational institutions. These are its flexibility and capacity to offer the appropriate forum for leaders to strike sensitive political deals. It should be highlighted that when the European Council fails in this regard – notably due to the large number of EU Member States or diverging interests – European leaders have shown the flexibility to go outside the Treaties and reach agreements among smaller groups of likeminded states within the European Council. Based on these observations we submit that the G20 should not become another international organization but rather opt for just that degree of institutionalization that will improve its efficiency. The outcome of the Cannes Summit of November 2011 seems to echo this opinion. In so doing, the G20 will retain its relevance in global economic governance by offering world leaders the appropriate forum to strike mutually advantageous deals.
Jan Wouters and Thomas Ramopoulos
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