more news which i will be here to bring you know shortly in just let's say an hour and a half see them. in .

closing the welcome to crossfire computable of all as the leaders of the group of eight meeting france more and more question the usefulness of this elite club of countries is it just a talking shop can it really influence the global agenda like it once did and should the g eight be abandoned in favor of g twenty. cross-talk the group of eight i'm joined by andrew hilton in london he is director and joint founder of the center for the study of financial innovation in istanbul we crossed to paul heinbecker he's a former advisor to canadian prime ministers on foreign policy and now a distinguished fellow at the center for international governance innovation and in toronto we have jeff rubin he's a former chief economist for a north american investment bank journalist and author all right folks gentlemen this is cross talk and you can jump in anytime you want and i very much encourage it and i do it andrew first in london this looking at some of the other pictures

that are coming out of the g. eight. festival as i think you could call it in france it looks very very impressive but is it just really just a talking shop do they ever really decided me thing and in the year two thousand and eleven is the g. eight powerful enough to drive the global agenda a lot of questions it's the side or a couple of days that you say i think you know if it is only a talking shop talking shop so quite important it's important that these guys should get together and talk informally amongst themselves after all that's how this group actually originated in the first place twenty years ago so i don't think that's a rather that's irrelevant itself it has a value but certainly the g. eight has been squeezed on the one hand the. countries in the world these days of the united states and china which is the g two or the g. twenty or perhaps even the g. thirty to bring in some of the really important developing countries so the g. eight is more symbolic than anything else paul do you agree with that it's more

symbolic than anything else in istanbul because it just symbolic and why waste all the money ok because i work in media everybody has to go to the g eight and another story happens in the world and we get squeezed because we don't have the resources to cover real important stories. well the media is part of the problem worse you have you have built up the g eight into some kind of enormous event and it's full of photo ops i'm not saying the politicians aren't also complicit in that but it has got to the point where it couldn't deliver on what it was promising because it was promising too much that was one of the problems and the other problem is the world of change and of course you have china india and brazil indonesia turkey korea these countries now matter a lot and the g eight just doesn't didn't have them at the table so the g eight really has two reasons for being now i think perhaps three one is

it gives the european leaders and the canadian leader but especially the european leaders privileged access to u.s. to the u.s. president for a day and a half that they wouldn't otherwise have they don't get that it's much at the g. twenty. it also is an organization where you can still rally the western sort of western willingness to do things to stump up the money for places like libya or egypt and the last thing is it's a place where these guys can get together and talk to their peers in a more relaxed manner than they can at the g. twenty there's more at stake in the g. twenty and and the g. eight is less. is less of a challenge for them to just think jeff i'm going to you in toronto how do you come out on this just a talking shop and if it is a talking shop well as it is and you point out an important talking shop. it may be a talking shop but i think for anything more than it's increasingly just function

zero any relevant i think organizations like the g eight or the g twenty probably had their zenith of influence after the last recession where of course we saw massive coordinated fiscal policy but none of those governments have the financial wherewithal to ever do that again and moreover many of those governments like europe china and the u.s. are moving in very disparate and contradictory ways so i don't think that we're going to see anything substantive out of it but i think as your line of questioning indicates expectations of these kind of events have fallen dramatically in the last couple of years and if i'm going to you know i mean research in this program it's often called a rich man's club that does not keep its promises do you think that's a fair assessment. well i think that's true on both counts yes i think it's very interesting just how low expectations are for this particular meeting when would have thought that given the problems that the european economies face given the

problems the economic problems which the global economy faces economics would have played a big part but instead it's very much focused on on political issues supporting the arab spring the japanese are talking about you know making a pitch for a trade agreement i agree but the focus is primarily political leaving the bigger economic issues i think the bilateral negotiations between the united states and germany representing the european union on the run and and the g. twenty with a much much broader agenda later in the year i just think that i cannot remember a g seven or g eight meeting with expectations that. well you can use one of them one of the issues is trying to interject it's on purpose of you know they're doing this on purpose they have they've said that the g. twenty is their preferred. institution for coordinating international economic

policy and they have tried their fortitude to limit the g. eight to political security kinds of issues so that's why you find i'm talking about but i do agree though that i mean the first person who thought the g eight made me may not be necessary anymore was sorry cozy himself the host for this meeting who was expressing doubts last summer whether you know what is the value was but. on the other hand the french have added some new things to the agenda from the internet to the arab spring to climate change in commodities and so on that they're ending up with a very large sort of. very large number of dishes on the table none of which are going to be properly cooked probably just you know it's interesting i mean from what we've heard already in this discussion here it's really agenda lite it has to be agenda light because no one is going to make any really big decisions it explicitly financial economic without speaking to the chinese first because they

count they count a lot now. well it may be agenda light but the economy is certainly not agenda light i think whether you're talking about china or europe or the us the recovery is facing probably its greatest sets of challenges that it has at this point i mean we're already seeing oil prices at one hundred fifteen dollars a barrel we're already seeing food prices of last cycles peak we're seeing inflationary fallout from that and rising interest rates so there's no set there's no lack of issues to talk about as far as the economy's agenda is concerned even though if that's not going to make the agenda this week's meetings jeff you bring a very interesting how you know i think it's i think it's very interesting is that you know the g eight is meeting to solve the world's problems we'll talk about that if it's just out of self-interest but it doesn't and it's been brought up here they're not dealing with their own real problems and when we look at getting out of

this deep recession not all these members are in the same page and not by any stretch of the imagination. i think that means that there's going to be some very important discussions taking place in the margins which aren't going really to be reflected in the formal agenda or in the communique afterwards i would imagine that look there's going to be tremendous discussion. amongst the europeans and between the europeans and the americans on the sovereign debt crisis in europe there are going to be discussions on the price the managing director of the i.m.f. that probably will be settled over the next couple of days effectively these are important issues which are not really appearing on the agenda but they'll certainly be dominating the margins of the meetings and that probably is where journalists and other people will look for the most important outcome of the meeting i doubt very much if they're really going to commit large sums of money to support the arab countries of the middle east and north africa i'd like to think they would but i think they're quite serious differences of opinion there and trying to commit

billions of dollars to support tunisia or wherever it is i think is probably a step too far at this stage qualifying going to you know i'm not going to ask anyone here to be a middle east expert here but i think it's quite interesting that this picture of aid for attorneys in egypt and you know a lot of people that are critical of western involvement in the in north africa would say you know you know the money might come but there's going to be all these strings attached and it's going to be the west involving itself in this very complicated in long term transformation i mean is is that it's shows it is the west trying to flex its muscle saying we're going to stay engaged in this region and they may think it's for good reasons but a lot of people in the region don't see it that way. there's a degree of cynicism in what you're saying there and i don't think that i share it what we're seeing in the arab world especially in tunisia and egypt is there is a nascent movement toward something that's a lot more in our interest in

a lot more in their interest and more particularly and that is a more progressive in a more democratic governed society we can we just don't have the smarts to be able to direct that kind of thing but we do have the capacity to to assist and to back them up as they go ahead. it may be that we're in financial difficulties but we're not going to be in financial difficulties forever and this is an opportunity that is not going to soon come again i think so the idea that somehow the west should keep its nose out of that you know it reminds me a little bit about when we went into libya in the first place a lot of people were saying well the arabs don't want you there the arabs who didn't want us there with. the now bankrupt leaders of the arab world the other kratz. who were running the place the people in the street the closer you got to the fighting the closer you got to the bullets flying the more they want to help so i think that we should be a little bit careful about deprecating what the west can do and indeed what the

chinese and the indians could do my only problem with this is is that the g. eight is a kind of an event and it can rally support and it can produce some resources but it isn't enough it isn't going to be you know it's going to be much more useful if you could get the chinese and indian and others to agree to this kind of process to get involved in it and because what we're talking about in egypt and in and in tunisia is going to be economic growth and that's going to take investment and that investment some of it has to come from places like india and china rather than from the west ok gentlemen at this point we're going to go to a short break and after that short break we'll continue our discussion on the world's most evil. disclose the state. of. the company.

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in. a little. kitchen. still. want to. welcome back across the capital about to remind you we're discussing the relative value of ga. and you can. start. ok jeff in toronto we probably would do the break you said you wanted to jump in so just go right ahead. right well let's not also forget what has driven our involvement in the region and that is that when you produce thirty percent of world oil supply you tend to catch a lot of attention from the largest world oil consumers and i think some of the skepticism around what's happening in libya is why are we intervening in libya

a country that produces one point six million barrels a day and not intervening in other places like yemen and bahrain that doesn't have that kind of oil supply and i guess you know one thing we've got to remember is where we have intervened in the middle east and i say the west danceable a they increase energy supply typically what's happened is that we've ended up getting less energy supply and any time there's been regime change and it doesn't really matter what the ology of the regime change is whether it's the replacement of the shah by the iranian revolution whether it's deposing saddam hussein the net result has been that that country has produced less oil and even more significantly exported less oil and of course where you are inviting a similar kind of a similar kind of result here in libya where we've already lost about one point three million barrels a day of production and given how tight the world oil supply is that doesn't seem

like anybody including saudi arabia can make up that shortfall well it's interesting it will certainly keep prop rises very high and you if i can go to you i mean again going back to the g. eight here i mean it's interesting the kind of what they want to project a caring you know we want to help these people we want to do it it's going to be aids it's going to be food security it's all the other security but if you look at it it's still very much out of self interest of the self interest of the member countries if they can agree on those issues so i mean it's if we don't have to look for you know this kind of. soft and furry west you know helping the rest of the world that they're making money off of it they're making very cold calculations about themselves. i think that's right when it comes to the middle east i disagree quite strongly with what i think paul was saying that we went into libya and we were cheered in the streets we went into libya and we were cheered by about thirty percent of the population in the streets about thirty percent is indifferent and

thirty percent supports gadhafi we've learned quite a lot of but this is a tribal society and i think obama was absolutely right to be skeptical about the british and french pressure to intervene we are slowly learning when it comes to north africa or in the middle east that intervention is very dangerous very difficult words are cheap but it's very difficult to see how intervention military intervention in particular produces a happy outcome i do think however that one thing will come out of the g. eight summit and that is that the e b r d the european bank for reconstruction and development will be given a mandate to expand its lending into the north african region i think there's a sort of consensus on that it will give levy are the something to do it's expensively paid bureaucrats in london who are finally have a job and i think that's not a bad thing. well. i think it's good that d.v.r. d. is getting involved maybe it's for the reasons and uses but i think it's also good

for you know it is a positive outcome where we're looking for a positive outcomes and what we seem to be talking about all the time is negativism and cynicism you know the idea of intervening obviously intervening in the overthrow of mosaddeq the iranian president in a democratically elected president one hundred fifty three dollars twenty years of stability and it's brought us the mullahs running iran ever since and that's not a good thing overthrowing saddam hussein was obviously not a good thing in a lot of different ways including the supply of oil but this is a different kind of intervention if i may say so you know get out he's got. we were in. this in the suburbs of benghazi he was talking about rivers of blood he was talking about going door to door and showing no mercy so you know that isn't.

if you look at it from a canadian perspective you know obviously the quantity of oil makes a difference on the price but we're also selling oil so that's not such a big problem for us but it's costing us a substantial amount of money to participate in the military activity and we're not doing it for our particular economic interests we're doing it specifically because there are a lot of people who are going to slaughter and if they weren't if there wasn't going to if there wasn't an intervention all right gentlemen i want to go back i want to go i want to go back to g. eight ok i still can't understand what humanitarian bombing really means but i'd like to go to jeff ok let's switch gears guys remember why involving humanitarian bombing means stopping get our fees people from killing people that aren't all right we're not doing a program on libya we're doing it on the g. eight so if i go to terrify ok. why do why don't we just scrap the g eight and just go g twenty because that's where you have the other major players there and that's when you can start making global policy that it could be

a win win for everybody because the g eight saw about the west and the peripheral countries on it from the west russia and japan ok and why can't it why can't the format be g. twenty where you can actually get things done i know it's bigger number but maybe more efficient for global problems. well it's a better proxy of the global economy because the the locomotives of global economic growth are no longer the united states or western europe or japan they're china and india however i don't think by adding in others zero that you're going to get any more harmony or accord i think in fact when you look at china and the united states this is increasingly looking like a zero sum world it certainly is when it comes to resource consumption and i'm not sure that you're going to be able to get any basic agreement on one fundamental economic a direction and i guess the biggest issue at the g twenty or the g.

eight is is how much longer is the people's bank of china going to be willing to finance an over trillion dollar budget deficit because if they step away from the treasury auction we just won't be talking about a sovereign debt crisis in terms of the so-called pigs but we'll be talking about certainly a whole new issue of risk in the us treasury market and that's probably going to remain the one fundamental issue is how all that much longer does does communism's last stand on the finance capitalisms fallen angel because that's really what's happening right now with the people's bank of china fund during this huge us deficit what do you think about that andrew i mean it's interesting is that you know we can go to different options g two you know just the two main countries and get rid of everyone else or go g twenty but a.g.d. eight isn't sustainable it's just it's turning into just a club and a club it really is just a photo op. well i think i think that's true and that's the point i was making at

the beginning i think it is important in some sense to as it were sort of feel the the feel the heft of somebody is handshake but that's about all that the g eight is good for but you don't actually have to go to a g. two you have to pick up the telephone i mean there in some sense the idea that you have these big grand international summits is primitive there are perfectly good as we are demonstrating today video links people can handle bilateral issues bilaterally without putting them into a multilateral forum and without really involving the press and creating all these expectations that the world will change as a result you can have bilateral but bilateral discussions between beijing and washington without involving anybody else without creating panic in the market someone hopes that those discussions are actually going on as some of the g. twenty yes the g. twenty is a it's a good shopping next shopping opportunity for the spouses of the leaders of the

countries involved whether it actually very much gets done british precisely because there are twenty people there who are in fact more than that because there are all sorts of international institutions involved twenty six or twenty seven all of whom need feel the need to grandstand so very little comes out of those meetings as well again really their opportunity for photos and for handshakes and not oh and as i say for shopping expedition it's not much else. i disagree with john because in fact progress profoundly without. g. two would not work for the same reasons that the g. eight doesn't work it out is that not enough of the major economies would be around the table if you don't have the indians there if you don't have the europeans there you're leaving out a very large amount of sort of international commerce so i think that the reason that they went up rather than down was because they thought it would work the second thing is to bear in mind it's of the g twenty shouldn't be seen as you go.

they are now presenting it in the media as something like g eight heavy g. twenty is really a process a lot of these things have set in train activities that are going to take a long time to develop you're not going to get a result of every every communique is not going to be you know sui generous a success in itself these things take time and they take a lot of time and finally the idea that leaders don't need to get together if leaders don't know each other and this is my own experience at least they don't learn to trust each other very much they don't learn to take it to understand what each other is issues are. and they begin and it's very easy to demonize people you don't know but when you have them in the room and you're talking to them you can't help but listen and at a certain stage you can either decided they don't know anything and they really are crazy or actually they have a point and and that's the way the international system works it actually works more of my face to face contact than it does by you know social media jeff in

toronto i think this one thing that you know i had jumping ahead in the modern to say there's one thing you know there's one thing that you said there which i do agree with and that is that the g. twenty is a process i mean there are no doubt there are several initiatives which are taking place under the g twenty on bella which are important and that will produce results over time but but if the g. twenty didn't exist those same initiatives would have been carried out and let's say the financial stability board i also go the bar's whole process there are lots and lots of other fora within which international initiatives which are complex and technical can take place not just the g twenty all right jeff i'm trying to i'm going to give you the last word should there be a g eight meeting next year. you know i'm not sure whether there should or not but i don't think that it any anybody in the g eight economies are going to be looking for next year's g eight meeting to come up with

a solution to their problems i think that countries are going to increasingly look within themselves to find their own solutions and that giant global overarching organizations are probably really a remnant of the global economy that's probably right gentlemen we've all run out of time many thanks to my guests today in london toronto and in istanbul and thanks to our viewers for watching us here on our t.v. see you next time and remember. a time when you're broadcasting live from washington d.c.

coming up today on the big picture. review the latest in science and technology from the realms. of the future coverage. if. he is easy to.

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