Summits promise brave new world

Barack Obama. Photo / AP

PARIS - A string of summits from London to central Europe has offered a panacea for the world's economic woes and given President Barack Obama, in his debut on the world stage, the chance to cement some deep cracks in United States-European relations.

The G20, Nato and European Union summits grappled with problems on a scale unseen since the end of the Cold War and were marked by street protests, sometimes violent, that mirrored the depth of anger at the recession and its cause.

In London, the heads of the world's 20 biggest industrialised and emerging economies spelled out measures to strengthen the safety net for developing countries battling economic collapse.

They also vowed - but notably gave few details - to reinforce regulatory frameworks to revive confidence in the finance industry.

"The first bricks in a new world order," was how the Financial Times described a part-full, part-empty outcome.

The big beneficiary will be the International Monetary Fund, whose war chest will be tripled to US$750 billion ($1.26 trillion).

The G20 also backed an extra US$250 billion to increase the fund's reserve assets and pump liquidity into the financial system to revive activity among scared lenders.

"These sums more than match the total amount of capital flight and bank loan redemptions from emerging markets since 2007 of over US$700 billion and will go a long way to supporting financial stability in the developing and emerging market world," said analyst Jan Randolph at IHS Global Insight.

In Strasbourg, France, and Kehl, Germany, Nato marked its 60th anniversary with a warm welcome for Obama, its leaders barely disguising their relief at the end of George W. Bush's aggressive unilateralism.

The 26 Nato nations ushered in Albania and Croatia to their ranks, boosting the alliance's reach in the Balkans.

Obama also won points for defusing a row over Nato's next secretary-general. Turkey had objected to the choice of Anders Fogh Rasmussen, the Danish Prime Minister, because in 2005 he had defended a Danish newspaper that had printed cartoons of the Prophet Muhammad.

But the European allies gave only a tepid response to Obama's prodding for more boots on the ground in Afghanistan. The allies agreed to send 3000 more troops on short-term assignments to help security for Afghanistan's August 20 elections and about 2000 more personnel to train security forces, leaving US troops the biggest component in the international force there.

Around 300 police will be sent on training missions, and US$600 million was pledged for financing the Afghan Army and providing civilian assistance.

In a speech in Prague ahead of a summit with the EU yesterday, Obama set out a vision for the 21st century that chimed entirely with European sentiments.

He declared America was "ready to lead" on tackling climate change and on engineering a shift away from fossil fuels to clean renewable energy.

He promised to lead a quest to purge the world of nuclear weapons - a goal he admitted may not be achieved "in my lifetime".

"No nuclear war was fought between the United States and the Soviet Union, but generations lived with the knowledge that their world could be erased in a single flash of light. Cities like Prague that had existed for centuries would have ceased to exist," Obama said.

"Today, the Cold War has disappeared but thousands of those weapons have not."

A missile launch by North Korea provided an immediate challenge to Obama's freshly-painted vision. He described the act as "provocative" and called for punishment, including by the UN.

Obama's mix of idealism and pragmatism sounded a bright, positive note to a Europe that loathed Bush's scepticism on climate change and faulted his war on terror and "axis of evil" as unfocused and simplistic.

But Obama came unstuck when he made a pitch for Turkish membership of the EU, arguing this would help anchor Turkey firmly in Europe.

French President Nicolas Sarkozy slapped down the proposal, reiterating his own opposition to Turkish membership and pointing out that it was matter for EU states to decide.