PM travels to Cannes summit with hope that more meat will be put on outline of deal, but will refuse to offer any more money to help with the Greek bailout
David Cameron will travel to Cannes for the G20 summit on Thursday urging EU members to act urgently to put more meat on the outlines of the deal agreed by eurozone members last week, but refusing to offer any more money directly to help with the Greek bailout.
As a non-eurozone member, the British prime minister is reluctant to comment directly on the Greek government's decision to hold a referendum on the bailout next year, but is privately deeply concerned.
Cameron is unwilling to speak in public on Greece's internal political turmoil, and doubts whether pressure from him to persuade the socialist government in Athens to abandon the poll ahead of Friday's confidence vote in the Greek parliament would do any good.
Nicolas Sarkozy and the German chancellor, Angela Merkel, along with EU and IMF officials, are due to meet the Greek prime minister, George Papandreou, to discuss the referendum.
Britain understands the frustration of the French, partly since both the French and the German leadership had told the UK that they thought they had persuaded Papandreou not to press ahead with a referendum.
The British, like the French presidency, now fear the wider Cannes summit agenda of securing help from China to fund the EU bailout may be lost in the wake of the new uncertainty gripping the markets.
Some members of the British government are also uneasy at the prospect of French officials threatening the Greeks to turn the referendum on the bailout into a wider in-out referendum on EU membership, with an out vote meaning an end to any further EU financial aid.
The chancellor of the exchequer, George Osborne – who will also attend the summit along with other G20 finance ministers – has already said the referendum adds to market uncertainty.
He said six weeks ago that he regarded the G20 summit as the deadline for sorting out the euro crisis, but now his officials admit that this can only be a staging post towards further progress.
British officials again insisted they will not contribute directly to the "special purposes vehicle" (SPV) that would help fund some of the bailout. The IMF might administer the SPV, but could not guarantee loans given to it, British officials believe.
But Britain is supporting in principle an increase in the overall funding of the IMF, with some of that money then going to countries such as Ireland, Portugal and Greece.
Britain is not expecting an announcement at the summit on how large an expanded IMF fund might become, even though the matter will be discussed. A figure is more likely in mid-December, the deadline for preparing the £130bn package for Greece.
Britain is a 4.5 % shareholder in the current $950bn (£594bn) IMF fund, representing a UK contribution of £29bn. At present, $250bn of the total IMF funding has been committed, including £5bn from the UK. In total, $110bn has been provided to Ireland, Portugal and Greece.
Cameron will resist a financial transaction tax (FTT) at the summit, saying Britain could only accept such a tax if it was implemented worldwide.
Australia, Canada and the US are all opposed to an FTT. Officials also point out that different forms of FTT are being proposed; Bill Gates, the Microsoft boss, is proposing a tax to fund international aid programmes, while the European commission is proposing a different, more broadly structured, tax, which could help fund the EU budget. Gates will address the G20 on his proposals on Thursday.
The government is trying to avoid rejecting an FTT outright in view of the unpopularity of bankers, but is not actively promoting the idea, fearing it would hit the City of London.
Asked during prime minister's questions whether he agreed with the archbishop of Canterbury's call for an FTT, Cameron said: "I think the archbishop of Canterbury speaks, frankly, for the whole country when he says that it is unacceptable in a time of difficulty when people at the top of our society are not showing signs of responsibility."
Cameron acknowledged there was "widespread support" for the principles behind the financial transaction tax – dubbed the Robin Hood tax – but said that Britain would only back it if it was adopted worldwide.
He added: "We must be careful that we don't allow other countries, including some European countries, to use a campaign for this tax – which they know is unlikely to be adopted in the short-term – as an excuse for getting off their aid commitments."
Separately, Cameron will provide a paper to the G20 on the future of global governance, including how the G20 could be put on a more organised footing, gradually supplanting some of the current roles of the smaller annual G8 summit attended only by heads of state.
Cameron's paper will also look at G20 relations with other international financial institutions. He proposes a Financial Stability Board should be established as an independent legal entity so it has the identity, authority and capability required to play a fully effective co-ordinating
role at the international level.
He is also proposing strengthening the World Trade Organisation's role
as guardian of the world trade system. He suggests the WTO is given
stronger surveillance powers to guard against protectionism, refine its
dispute-settlement mechanism and to force through changes to outdated
trade rules.
Cameron is due to arrive in France on Thursday morning in time for a lunchtime discussion on the global economic crisis. In the afternoon, the heads of state will receive a report from Gates on what is described as innovative financing for development, followed by a working dinner at which Cameron will present his paper on global governance.
On the second and final day of the summit, the leaders will discuss financial transactions, before a discussion in trade and climate change, and lastly a discussion on employment and social issues.
There will be three separate communiques. Cameron is not expecting to hold bilateral discussions with Barack Obama.
Since the financial crisis broke in 2008, leaders of the G20 members have met in London in April 2009, Pittsburgh in September 2009, Toronto in June 2010, and Seoul in November 2010.
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