President Obama must be feeling what it’s like to be a faded international rock star as he attends the G20 meetings in Cannes, France, this week.
Not so long ago the center of everyone’s attention, from adoring throngs in Europe to fellow world leaders, Mr. Obama finds himself taking a back seat. The US president is commanding less time in the spotlight as other headliners – the European debt crisis, a cash-flush China, even American billionaire philanthropist Bill Gates – take center stage.
Today, Obama is hobbled both by a weak US economy and a sharply divided Congress – preventing him from attending the meeting of the Group of 20 world economic powers with anything resembling a “this is how we do it” swagger.
Obama did take part in a late-night meeting Thursday with European leaders during which Italy, whose debt problems are perhaps more worrisome than those of Greece, acquiesced to International Monetary Fund review of its efforts to implement an austerity plan. The US and other nations said they would not add money to an IMF fund upon which deeply indebted nations could draw unless Italy conceded to some outside oversight.
Still, things were a lot different for Obama just a couple of years ago, when he wowed world leaders on his first trip to Europe as president in April 2009 – a trip that included the G20 London summit.
“What a difference 2-1/2 years make,” says Heather Conley, director of the Europe Program at the Center for Strategic and International Studies in Washington.
“President Obama was welcomed with great euphoria and expectations for a new era, and the G20 came together to do some bold things to save the economy,” she says. “Now [Obama] is one of many at the table, not particularly influential in resolving the European crisis, not proposing any bold initiative for addressing the global economy.”
No one is suggesting that the US should solve Europe’s debt crisis – indeed many experts recall the cold shoulder Treasury Secretary Timothy Geithner received recently when he made a few friendly suggestions to his European counterparts. But the degree to which Obama is appearing to sit on the sidelines in Cannes suggests a different world from the one he entered as president.
“A lot has changed for Obama in the two years,” says Steven Groves, an expert in international institutions at the Heritage Foundation in Washington. “The economy has continued to tank under his leadership, and the Europeans are rightly focused on their own crisis, which has the potential for destroying the whole Europe project.”
The European debt crisis is rightly the focus of the Cannes summit, Mr. Groves says, given the capacity it has for dragging down the world economy. “This summit is going to be so much more about the European economy and the whole European project, than about the rise or fall of the US president,” he says.
In the past, Obama has been a champion of economic stimulus measures to get the global economy moving, but he seems even less likely to be heeded when he can’t get his own jobs bill through Congress. Not helping matters, the Cannes summit also began a day after the US Federal Reserve lowered forecasts for US economic growth – with no new plans to stimulate growth.
Obama may have come to Cannes with few initiatives up his sleeve, but that has not stopped another American from stepping in. Microsoft founder Mr. Gates on Thursday campaigned for a tax on international financial transactions to fund poverty-reduction efforts worldwide. The so-called “Robin Hood tax” is one recommendation of a report Gates prepared for French President Nicolas Sarkozy as part of the French G20 presidency.
As Obama has seen his star-power eclipsed, another global power – China – has moved to the forefront. Speculation swirled Thursday around whether China would intervene in the European debt crisis by investing in the European Union’s debtor-rescue fund.
Some Chinese financial officials have suggested that China could invest as much as $100 billion by buying bonds in the EU’s financial-stability fund.
That prospect has prompted some international economists to trumpet the Cannes G20 summit as ultimately marking a turning point in global economic affairs – from American dominance to Chinese supremacy.
“The Chinese buying bonds is nothing new, we know something about that ourselves,” says Groves, alluding to Chinese investment in American debt. “But the appearance, if not the reality, of a ‘Chinese bailout of Europe’ would have a sense of precedence to it and would be seen as some kind of turning point.”
But “the bigger question” is about global leadership, says Ms. Conley of CSIS.
“The Chinese don’t seem themselves in the role of global leader, and what they do in Europe is going to be fairly modest,” she says. What is needed is for someone to step forward with “bold solutions” for the global economy.
But who does that leave? The US, the traditional leader, is “tapped out,” she says – as suggested by Obama’s low profile at Cannes.
That leaves the unsettling prospect of a world without global economic leadership, Conley says.
“When no one comes to the rescue, even as we are more interdependent economically, what does that portend for the future?” she says. “We can watch Cannes for hints, but it’s a question with far-reaching implications.”