More noises off came from the large numbers of protestors who descended on the City. A small group of hooded anarchists smashed their way into a branch of the Royal Bank of Scotland. Sir Fred Goodwin was hanged in effigy. Slogans were sprayed: ‘Eat the rich’. City dealers mocked the demonstrators by waving £10 notes at them from upstairs windows. There were more than a hundred arrests. One man was killed by a heart attack and his death became a cause célèbre amidst allegations of police brutality. Yet there was also a carnival atmosphere about many of the protests and none of the mass rioting predicted by alarmists.
The Wednesday night dinner at Number 10 was a so-called ‘austerity meal’ cooked by the celebrity chef Jamie Oliver and some of his apprentices. Nicolas Sarkozy did stay for the Bakewell tart dessert, but the French President gave the British a small scare by arriving late for the Scottish salmon starter. When he finally turned up, Sarkozy found himself seated next to Hu Jintao, the President of China. Sarkozy was very unpopular with the autocratic regime in Beijing for promoting the cause of Tibet. His campaign against tax havens was also a big irritant with the Chinese, who were jealously protective of Hong Kong and Macau. Hu Jintao, a taciturn man even when in a sunny mood, exchanged only a few frosty sentences with his French neighbour.
There was some direct negotiation at the table as the leaders, each wearing translation headphones, chewed their way through a lamb main course. Brown was focused on the leader seated to his right, Dr Hu. His agreement was vital if China’s vast foreign currency reserves were to be accessed to refinance the IMF. The Chinese were also expressing resistance on behalf of many of the non-Western economies to their sovereignty being infringed by international regulation. Differences about how far and fast they should go were narrowed over the dinner table. As the leaders talked, the British team of summit ‘sherpas’ were gathered nearby at Church House under the direction of Jon Cunliffe. The latest intelligence from the dinner was communicated from Number 10 to the Cunliffe team so that they could update the text of the communiqué.57
When coffee was served, the leaders moved into a state room, where they were joined by their spouses, who had been having a parallel dinner with Sarah Brown and a selection of celebrities. Silvio Berlusconi, shifting character gear from superannuated clown to aged playboy, quickly alighted upon the supermodel Naomi Campbell. Barack Obama, whose children were Harry Potter fans, bagged an autograph from J. K. Rowling. The sherpas carried on working into the night as the leaders departed for their accommodation in embassies and hotels. Shortly before midnight, Gordon Brown retired to his own bed.
He was up at five on Thursday morning for his first briefing from the Cunliffe team. The report was broadly positive. The Prime Minister was also buoyed by news that Asian markets rose overnight partly in expectation that the G20 would be a success.
As the sun came up over London, the most powerful men and women in the world were on the move. Some clattered across the city by helicopter, others travelled in snaking convoys of polished limousines, each headed towards the Docklands of east London in the shadow of the tottering citadels of finance in the Square Mile and Canary Wharf. The summit venue was the ExCeL centre, a gargantuan windowless tin shed on the Thames. ‘What a dump!’ groaned one Italian correspondent, surveying the baleful moonscape of concrete, graffiti and unfinished building works in the Docklands dawn.58 The soulless venue stood on the remains of what was once the world’s largest port. The Peruvian Wharf was originally built for unloading shipments of guano. The world’s leaders were meeting on a site most famous for bird shit. The setting was about as remote from the Palace of Versailles as it is possible to be.
The huge throng of journalists, 2,000 in all, were penned in the summit yellow zone entirely sealed off from the presidents, prime ministers and potentates cocooned in their VIP area in the summit red zone. As the leaders began arriving, Brown worked the room, trying to ensure that no-one was wriggling out of agreements made at dinner the night before. Obama, placed at the centre of the table, dominated the conversation over breakfast. Sarkozy, who looked frustrated in a seat at the far end, started making and taking an endless number of calls on his mobile. ‘He was never off the phone.’59
The formal session then began in a windowless oval room with each leader restricted to just four officials. This was not one of those summits where everything is fixed in advance. A lot would depend on what happened around the table. There was a lively if unconstructive contribution from Cristina Fernández de Kirchner, the President of Argentina. Known as the Queen of Botox, she launched into a tirade against Western capitalism. ‘You could see Obama sitting there thinking: “I’ve got four, probably eight more years of this.” ’60
Brown, in the chair, let the Latin Botox Queen expend herself before bringing the leaders back to the formal agenda. He and Obama had been forced to accept that they were not going to get agreement to a new fiscal stimulus in the face of the opposition of France and Germany. Merkel – ‘a very impressive negotiator’ – was not budging about that.61 Brown had refocused on persuading the leaders to sign up to other measures that he could present as a plan for recovery and reform. ‘Grinding out deals, that is what Gordon likes doing and that is what he does best.’62 During breaks, they retired to a ‘leaders’ lounge’ fltted out with white and pea green sofas and artificial trees, an attempt to synthesise a bucolic scene inside the metallically cavernous ExCeL centre.
Nicolas Sarkozy located a new target for his anger. This was Mirek Topolánek, the Prime Minister of the Czech Republic. He had just lost a confidence vote in his own country, but he still retained a seat at the G20 because the Czechs currently held the rotating presidency of the European Union. The Czech had dismissed Obama’s spending plans as ‘the road to hell’. Sarkozy hauled Topolánek aside to accuse him of presuming to speak for the whole of Europe. The two men got into a finger-pointing row. The Czech then gave the other leaders a bizarre explanation for his attack on the Americans: the night before he made the inflammatory remark he had been listening to Meat Loaf’s Bat Out of Hell.63
Mid-morning, the leaders were ushered out for another ‘family photo’. As the curtain on their private area was opened, the incorrigible Berlusconi barged his way to the front on his continuing mission to get close to the American President. Obama fell into conversation with Dmitry Medvedev, the President of Russia. Berlusconi inserted himself between them, beamed and gave the thumbs-up, like an over-excited tourist collecting photos of himself with famous people. Someone not so famous was absent from the line-up: Stephen Harper, the Prime Minister of Canada. No-one spotted the gap next to Angela Merkel until Obama asked: ‘Where are the Canadians?’ Canada resented its designation as a ‘tier two’ nation in pre-summit briefing by British officials insensitive to Canadian pride, a fragile commodity which was further dented by the time it took for anyone to spot that their Prime Minister was missing. The explanation for his absence turned out to be prosaic: he was in the toilet. A few minutes later, the leaders were back, refixing their rictuses to have the picture retaken. The President of Indonesia had now gone missing. The previously inescapable Berlusconi, having already bagged the snap he came for, had also vanished. After a bit of flapping among the officials, they decided to abandon any further attempt to take the photo.
When the leaders returned to the negotiating table, the British began to swell in confidence that they had agreement within grasp. ‘I cannot imagine the G20 happening in that way without Gordon,’ says one admiring minister on his team that day. ‘He uniquely gets international financial governance. He knows how to chair these meetings. Unlike most leaders, he’s prepared to do the negotiating at the table rather than leave it to the sherpas.’64
The atmosphere over the roast beef lunch seemed so positive that the British decided to effectively scrap the afternoon ‘plenary’ and keep the leaders at the dining table to conclude the business.65 Brown was exploiting his ‘skill set’ as the person ‘who knows the subject better than anybody e
lse around the table’.66 According to one impressed civil servant in the room: ‘Gordon just bulldozed it through. He crashed the gears.’67 This approach was not without risk. There was still an outstanding disagreement on IMF gold sales. Nor had everyone signed up to the communiqué’s wording about fiscal stimulus and tax havens. All of this had to be resolved in the two hours left. ‘We were pushing things to the wire,’ says one of the British team.68
As the clock ticked towards three o’clock, Sarkozy made a final thrust for more aggressive terms about tax havens. ‘Sarkozy was fighting until the final minutes to make sure it was something he could live with.’69 The Chinese pushed back. The two delegations got into a ‘wrestling match’.70 This climactic flare-up meant that the final communiqué was not going to be printed in time for the Prime Minister’s closing news conference. If this quarrel turned really ugly, it would wreck the plan to smoothly announce a success before the close of the London markets. As the chairman, Brown could not leave his seat to take aside the French and Chinese to sort out their differences. He turned to the team sitting behind him: Jon Cunliffe, Tom Fletcher, Jeremy Heywood and Shriti Vadera. Brown groaned to them: ‘God, this tax thing.’ His eye focused on Vadera: ‘Can you fix it, Shriti?’ She grimaced and responded that the Presidents of France and China were unlikely ‘to listen to me’. They would, she suggested, listen to Obama.71 So it was the American who pulled the two warring Presidents to a corner of the room, their officials and translators scuttling along behind them. Obama suggested that the communiqué should ‘take note’ of an OECD list which named and shamed rogue offshore tax havens rather than ‘endorse’ the blacklist. He was essentially proposing an agreement to disagree that allowed both the squabbling leaders to claim a victory. Hu Jintao could save face because China did not belong to the Paris-based OECD. Sarkozy would still be able to brag that he had scored a victory against the paradis fiscaux. ‘We twisted the language of the communiqué a bit to keep Sarkozy happy.’72
The intervention of the American was admired. ‘Obama was a class act,’ thought one wowed British official.73 To Mark Malloch-Brown, he ‘showed a judgement, a maturity, a sureness of touch in the actual room itself which was remarkable for what was the newest member at the table’.74 On Peter Mandelson’s account:
anyone there could not fail to be struck by President Obama’s contribution. A combination of political skill, intellectual sharpness and charm, and an ability to work with our own Prime Minister in such a quick way, given that they had barely known each other or worked together before the G20.75
As the leaders formally signed off on the summit communiqué, Obama beckoned over a couple of Brown’s officials and asked whether they’d mind if he said a few words before the leaders got up from the table. Of course, they didn’t mind. Obama had already been repeatedly flattering about their boss. He self-deprecatingly referred to himself as ‘the new kid on the block’ and charmed everyone present by saying that the summit had demonstrated their ability to be ‘confident in a crisis’. The American then poured yet more praise on the Prime Minister for the skill with which he had chaired their talks. After Obama’s classy toast to the host, the rest of the leaders clapped Gordon Brown.
Then Nicolas Sarkozy made his move. The applause had barely died before the diminutive French President was out of his seat and moving for the door. He hurtled out of the VIP suite in the summit red zone and sped in the direction of the yellow zone, where the media waited for the closing statements. In his haste to get there, the French President banged past Michael Ellam and Stewart Wood, two members of the Number 10 team. It took the British officials a moment to work out that Sarko was determined to breach summit protocol by getting in front of the cameras before his host. Once Team Britain comprehended the intentions of the French athlete, the Prime Minister’s officials dispatched Brown off at a pant to his news conference. It was too late to catch up. By the time the Prime Minister got to his podium, his French rival was already speaking from his lectern in the next-door room. It was cheeky of the impish French President to try to upstage his host and he was chastised for it even by some of his own press.76 Yet Sarko’s sprint was also a form of compliment to Gordon Brown. The French President arrived in London breathing Gallic threats to walk out. By the end of the summit, Sarkozy wanted to be the first to make a public claim that the G20 was a triumph.
He had not been speaking for long when, just before four, Gordon Brown arrived at his podium. Flanked by flags, he declared: ‘This is the day that the world came together to fight back against the global recession, not with words but with a plan for global recovery and reform.’77 The American networks switched their coverage to him. Obama, more graceful than Sarkozy and happy to let Brown have his moment in the sun, did not begin his news conference until the Prime Minister was finished. Brown’s biggest boast was that they had collectively pledged large sums to inject life into the global economy. The resources of the International Monetary Fund would be tripled to $750 billion, a bigger boost than British officials had expected to achieve. Developing nations would be given access to $250 billion of currency reserves. Another $250 billion was promised in credit for trade finance.78 Gordon Brown, with his eye on the headlines, had wanted to be able to package up the sums to produce a plump, round headline figure of $1 trillion.
On closer inspection, not all the pledges were as solid as he made them sound. They included re-announcements of previous promises and deals that were only half done. Some of the money was not really new and some of it might not be spent. Brown’s familiar vices of numerical inflation, double-counting and re-announcing promises had now gone global. From his rival podium, Sarkozy was inevitably proclaiming victory for the French by declaring that ‘a page has been turned’ on ‘Anglo-Saxon’ capitalism and ‘the madness of this time of total deregulation’.79
Obama declared it to be a collective endeavour: ‘By any measure, the London summit was historic. It was historic because of the size and the scope of the challenge that we face and because of the timeliness and the magnitude of our response,’ said the President. The decisions they had made were ‘bolder than any other response to a crisis in living memory’, though ‘whether they are sufficient, we’ve got to wait and see.’80 Angela Merkel was probably closest to the mark with her assessment that they had reached ‘a very, very good, almost historic compromise. This time the world does not react as in the thirties. This is a victory for global co-operation.’81
Divisions about how to tackle the crisis were not entirely bridged and imbalances in the global economy were not addressed. Brown flirted with hubris when he declared that reformed global regulation of financial markets would ‘prevent such a crisis ever happening again’. Ever is a very long time in both politics and economics. He was supposed to have ended boom and bust once before.
He was over-reaching rhetorically when he proclaimed that this was the birth of ‘a new world order’. Yet the achievements of the summit were not trivial. The positive post-summit mood music was a boost to confidence. It was important that all the leaders wanted to be seen as part of the solution, even the showboating Sarkozy and the prickly Medvedev. The Russian President accurately observed: ‘Twenty or twenty-five years ago one could not even imagine that such different countries with such different economies, such different mentalities and historic traditions, would sit at the table and could agree in such a difficult situation on how to act.’82
The agreements did generate some of the ‘oxygen of confidence’ hoped for by Brown. A rally in global stock markets gave credence to his claims to success. The verdict from George Soros was a thumbs-up: this was ‘a turning point’ because ‘for the first time’ the world’s leaders had got ahead of the curve of the crisis.83 By hothousing the leaders at the summit, they were driven to agreements that might not otherwise have happened quickly or even at all. Putting them together also produced some progress on off-agenda issues: the Russians and the Americans started talking about cutting their arsenals
of nuclear warheads. The additional resources for the IMF would help rescue fragile emerging-market countries from a slither into even worse slumps. Tax havens were now on notice to clean up their acts or face sanctions by the end of the year. The international regulatory system was at last to be extended to large hedge funds and other elements of the shadow banking system that could pose a systemic risk. The squeals of complaint from the gambling community in the banks suggested that they regarded these measures as a serious threat to their under-regulated world.84 The leaders failed to set a date for completing world trade talks, but they did at least pay lip-service to not sliding into beggar-my-neighbour protectionism. There was also a commitment from all, including the previously resistant Chinese and Indians, to engage with the climate change talks in Copenhagen. Vince Cable, so often one of the Prime Minister’s most piercing critics, was positive: ‘The world is a different place today. I think it’s better. This meeting could have failed completely, but it’s come to some good positive conclusions.’85
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