Can summits save the world - or the euro?

It's Wednesday, so it must be Cannes. Like clockwork, the Greek Prime Minister has blown the lid on the latest plan to save the euro, just in time for the G20 summit.
French President Nicolas Sarkozy (C) and French Foreign Minister Alain Juppe (R) arrive for talks at the G20 meeting in Cannes Will G20 leaders be able to make progress in fixing the global economy?

But can summits really fix the euro, or the global economy? Or is the lesson of all these crises - all these "make-or-break" meetings - that national governments and global markets just don't mix?

That was the subject I wanted to discuss on the third Stephanomics programme. You might say it was good timing.

I had a stellar cast: Jim O'Neill, of Goldman Sachs; Willem Buiter, now at Citigroup, previously a policy maker at the Bank of England; and Katinka Barysch, deputy director of the Centre for European Reform.

I started by asking whether the Greek Prime Minister had revealed the whopping hole in the middle of all these rescue schemes, that none of it is going to work, if the population don't go along with it (however reluctantly).

The discussion ranged far and wide: from the German newspapers' conflicted attitude to the idea of a Greek referendum, to the benefits (or otherwise) of having an Italian now at the head of the European Central Bank.

You'll be interested to hear that at least two of my guests thought the financial markets were a lot more patient in waiting for a solution to the euro crisis than we give them credit for. You might say the last month was evidence of that.

Members of the eurozone would have to give up some national sovereignty to make the single currency work, but Willem Buiter thought the sacrifice would be smaller than many supposed.

At a global level, they didn't think the G20 or the International Monetary Fund had the capacity to "fix" global imbalances, or to force countries to do anything they didn't want to do already.

At which point you might have expected a lot of hand-wringing. After all, didn't Bank of England governor Mervyn King tell us the other week that our recovery would be stymied, unless and until those imbalances were fixed?

But no, the general feeling was that the governor had it wrong: either the imbalances were going away of their own accord (O'Neill) - or they were never the problem in the first place. You can read Martin Wolf's column in the FT today if you want an entirely different view.

Strange but true: I've presented three conversation programmes about the global economy in the midst of all this turmoil, and they have all concluded that the world wasn't in such a bad way after all. Maybe we should do this more often.

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