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Themes and scenarios for G8 summit in Italy

(Agencies)
Updated: 2009-07-03 11:22

Leaders from the Group of Eight industrial nations and major developing nations will hold talks from July 8-10 in the central Italian city of L'Aquila.

The talks are expected to focus on the state of the world economy, financial regulation, climate change and trade and development. Following are the main themes that will be discussed and possible outcomes from the meeting.

Financial Crisis

G8 talks will open with a discussion of the financial crisis, with the first day's statement likely to focus on signs of stabilization in major economies and aiming to send a positive message on the global economic outlook. Talks will also broach possible exit strategies from the downturn, though G8 leaders are likely to emphasize that it is too early yet to wind down policy stimulus.

Italy is pushing for the adoption of an agreement on "global standards" of regulation: an international charter covering everything from executive pay, corporate governance, banking, taxation, trade, corruption and regulation of financial markets.

Critics of the 70-page "Lecce Framework" - named after the Italian city where it was drafted by finance ministers last month - say it is a compilation of existing guidelines, too broad to be effective and toothless because its lacks penalties.

While the G8 is unlikely to adopt a new global charter officially, it may recommend a document to the forthcoming G20 summit in Pittsburgh in September.

Germany is pushing the G8 for tougher regulation, accusing Britain in particular of opposing moves for tighter rules. Chancellor Angela Merkel is proposing a broader "charter for sustainable economic development."

Environment

With eyes on December's UN climate change summit in December in Copenhagen, due to produce a replacement for the 1997 Kyoto pact, leaders will try to narrow differences over the cuts in carbon emissions required by developed and emerging economies, and funding for low carbon technology.

G8 leaders are expected to agree to a goal to limit global warming to no more than 2 degrees Celsius, and this could even be extended to the 17-member Major Economies Forum which meets on the second day of the summit.

G8 nations are also likely to harden a previous "vision" of halving carbon emissions by 2050, while the MEF could also sign up to this goal for the first time. If adopted, this would mark significant progress toward a new UN climate pact in December.

British Prime Minister Gordon Brown is expected to press for the G8 and MEF to back a $100 billion a year fund to tackle climate change in developing countries by 2020, but the figure falls far short of what these countries want.

Aid, Food Security

G8 nations are under pressure to ensure they are meeting commitments to boost aid to the developing world, and members will discuss setting up a taskforce to monitor implementation.

US President Barack Obama has proposed some $3-4 billion of US funding for food security programs over the next three years, with the G8 and G5 looking at least to match that commitment, G8 diplomats say.

The G8 may also draw up internal rules to police how its own members meet their aid commitments and call on developing nation donors to meet its standards of transparency.

Iran

Italian President Silvio Berlusconi said the G8 summit could move to tighten sanctions against Iran, already adopted over its nuclear program, after disputed presidential elections last month which triggered violent protests.

However, G8 officials have said it is not the appropriate forum for such a move and any "sanctions" would be limited to a condemnation or measures such as the withdrawal of diplomats.

German Chancellor Angela Merkel has called for the summit to send a strong, united signal to Iran on human rights, while keeping open the possibility of talks on its controversial nuclear program

G8 foreign ministers last month agreed a strongly worded statement "deploring" electoral violence in Iran but held open the door to resume nuclear talks.

Trade

Leaders will attempt to give a fresh impulse to the Doha development round of world trade talks, launched in 2001, which ran aground a year ago over differences between the United States and developing nations like India over agricultural subsidies, among other issues.

Delegates will focus on agreeing procedures for negotiating Doha, and may express hopes for concluding a deal in 2010, G8 diplomats say.

World Trade Organization Director General Pascal Lamy will be present at the talks and hold meetings with leaders.

Brazil, another important agricultural player at the talks, has played down hopes for an important breakthrough at the L'Aquila summit.

Oil

French President Nicolas Sarkozy wants G8 nations to discuss regulating oil prices to prevent the wild swings of recent years and ensure fair value for consuming and producing nations.

Previous attempts at doing so have fallen flat and there are doubts whether a consensus exists within the G8, with Canada already suggesting it may not embrace the proposal. French sources say oil prices need to be high enough to spur investment in the sector and also encourage green technology.

The price of crude oil soared to almost $150 per barrel last year, only to fall to under $40 some months later due to the global economic crisis. It is now trading around $70.