President George W. Bush recently announced that the international financial summit that ought to address reform of the international financial architecture will meet in Washington on November 15. Initially only members of the group G20 will participate. The G20 is a group of developed and emerging countries that does not include Spain. Spain has as a result not been invited to a crucial summit that may set the basis for a well-needed debate which should set the new rules of a global, redefined capitalism.
Spain’s lack of representative power in the international institutions is latent. Spain’s economy is the 10 largest in the world, yet the country is still the fifth largest of the European Union in terms of both population and gross domestic product. Whereas it is understandable that Spain is not part of the G8, composed of the seven most industrialized countries and Russia, it is arguable that Spain is not part of the G20, an ensemble of nations that includes the larger four European countries Germany, France, United Kingdom and Italy. G20 countries include 19 of the largest economies in the world plus the European Union. The countries are the following: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the European Union. The G20 was established in the G7 meeting that took place on 26-September 1999.
There are two key questions regarding Spain’s absence of the G20 that has until now been irrelevant, but now proves detrimental for Spain’s influence in the ongoing financial crisis. The first question deals with who is to be blamed or not having lobbied to be considered for admission. The second question deals with what steps should be undertaken subsequently in order to be part of the G20.
The first Aznar administration was coincidentally more keen and active on foreign policy than any of the two Zapatero administrations thus far. Aznar fought each and every battle to earn more representation in the leading institutions of the world, including the European Union and the G8. A failure on his behalf or on behalf of his former Foreign Affairs Minister Josep Pique. Either Aznar or Pique must have failed to anticipate the increasing importance the G20 has earned over the years as a forum of discussion between the developed nations and the emerging world. The G20 also represents a majority of the population of the developing world, and incorporates some of the most populated countries in the world, including China, India or Indonesia. Pique, until recently President of the Popular Party in Catalonia, and currently President of Vueling, and airline, and Mixtafrica, a real estate company, was Minister of Foreign Affairs at the time the G20 was conformed. I met with Pique last June. The Catalan is a bright economist with a strong reputation in and outside Spain. A businessman, Pique entered politics leaving behind a position as President of Catalan group Ercros, a chemical company.
Spain is the only economy of the world’s top 10 that is not represented in the G20. Spain’s financial sector has remained relatively unhedged from the turmoil in the markets, and maintains strong balance sheets and sound risk management policies enforced by the Bank of Spain, considered by the Financial Times the best financial regulator of these times of financial turmoil. Zapatero has approached Spain’s lack of presence in the summit persuading President Nicolas Sarkozy and the pair McCain/Obama, but the efforts have not yielded a positive outcome. An alternative approach would need to bring allies to the enlargement of the G20. Candidate allies may include Chile, the Netherlands or Sweden. With a stronger lobbying power and an easy way to persuade European countries and Latin American countries that are already part of the G20, Spain may be able to lead an effort which should conclude in the admission of Spain and the enlargement of the base of the G20, which ideally and on the long run should become inviting for each and every nation.
Originally published at 5spaniards on Oct 24 and reproduced here with the author’s permission.