bretton woods 2 is perhaps their last chance

And so, our leaders will kindly refounding capitalism this weekend. Washington, they must take a "Bretton Woods 2", intended to echo the "Bretton Woods 1", which took place in July 1944. After the Conference which had created the IMF, the World Bank and international monetary system, it is rethinking the rules of global finance. But their Conference risks less resemble that of 1944 to 1933. Because there was in London this year that a meeting to plumb the world economic and Monetary Affairs, a kind of "Bretton Wood 0." Leaders abutted on an obstacle, on which their distant successors may also run. Once again, the story illuminates the present.

This leaves us in June 1933. The economic crisis ravaging the developed world. Six major countries gather to put flat subjects which get angry European countries to the United States following the war of 1914-1918, monetary mess, collapse of trade following the adoption of protectionist measures. The newly elected President, Franklin Roosevelt, decides to not come, a bit like Barack Obama in 2008. He prefers to take a few days of rest on a yacht (it does invents not). On the other hand, journalist and novelist Herbert George Wells, author of the famous "war of the worlds", attending the London Conference. It in fact the starting point of a book by late 1933 published fiction (1). He tells how Edouard Daladier, the head of the French Government, refers to "the urgent need for a progressive development of great works around the world to absorb unemployment and restore consumption". Of Keynesian economics before Keynes... Wells tells especially the rise of selfishness which he fail the Conference. After a promising start, "national delegates began to focus more explicitly on the fact that national interests should not be sacrificed on the altar of the general interest, and soon it became doubtful that there may be something like the general interest." "The world economic conference became by of invisible transitions global economic conflict."

In his speech of receipt of the Nobel Prize in 1951, Léon Jouhaux also tells the London Summit, and others held at the same time. The trade unionist who founded FO, ardent pacifist activist, is little more leads: "all these conferences, all of these meetings failed to cure the world of the economic crisis: the desire to organize the world rationally, or at least alleviate the inconsistencies more apparent had been less strong than the inertia combined with selfishness and lack of understanding."

The risk is therefore clearly identified: the general interest must be taken into account beyond national logic take to dangerous folds. The proper functioning of finance is a "well global public". For the Washington Summit, the message is clear. Governments must act otherwise together, at least way coordinated, to stem the crisis and thus save the banks, manage the interest rate, initiate programmes of budgetary support, contain the protectionist temptations. Then, always together, invent more efficient and more effective regulations without being crippling.

The consolidation of the institutions created at Bretton Woods can no longer be postponed indefinitely. In times of crisis, the IMF becomes essential. Support for large emerging countries who face capital flight, it money, much more than its current resources of the order of $ 250 billion. There also need to circumvent national interests. Because the power in the IMF must represent the economic powers of today and tomorrow, not those of the day before yesterday. Today, China has 3.66 of the voting rights, the India 1.91, Brazil 1.40, while the large Western countries have approximately 5 (4.86 for France, 5.99 for the Germany) and the United States 16,79. The France will for example accept a decrease in power. The same reasoning applies to the informal bodies such as the G7. This is not a chance if the Washington Conference brings together a G20 where are China, the India, South Africa or the Brazil alongside the Western countries.

Beyond that, it will also consider new institutions. Proposals abound. In an electronic book published Monday under the guidance of two renowned economists, Barry Eichengreen and Richard Baldwin (2) experts propose among other international banking Charter, a world financial organization, a global regulatory framework for credit rating agencies, new mechanisms in the event of insolvency. The success of "bretton woods 2" will not be measured in its results, but its ability to initiate a dynamic. The idea of a new Summit within 100 days is interesting... If be aware that the pressure will never replace the envy.

The sword of Damocles will remain however suspended over our heads, a sword that did not exist in 1933 or in 1944. It is the doubt on the ability of States to withstand the crisis financially. Antan, talked about "blowing up the Bank." Today, there is a risk of "jump the State", both are huge undertakings in recent weeks by the public authorities to save financial institutions in full collapse. The Iceland has already exploded. Recently, the Spain, the Austria and the Belgium have postponed several programs of government bonds to avoid paying too much. The worst is far from being safe, but it cannot be excluded. The crisis of the 1930s had legitimized public action. "bretton woods 1" had devoted the role of States in a vivid manner. In the post-war years, they seemed able to drive economies. But today, they accumulate debt at an unknown rate in times of peace. "bretton woods 2" is perhaps their last chance.