G8 leaders gather in France, eyes on Arabs, IMF

Leaders of the Group of Eight gathered in France on Thursday to agree aid for new Arab democracies but...

Picture: EWN

Leaders of the Group of Eight gathered in France on Thursday to agree aid for new Arab democracies but with a host of other issues demanding their urgent attention, from European debt to war in Libya and Yemen.

As the traditional club for the rich industrial powers, the G8 may also rally support behind France's candidate to run the International Monetary Fund in the face of discontent among the emerging economies, who want a bigger say at the IMF.

China raised the prospect of further wrangling over the choice of French Finance Minister Christine Lagarde to replace Dominique Strauss-Kahn, who quit when charged with attempted rape. Beijing urged "democratic consultation" on the IMF post, casting doubt on Paris's claim that Lagarde had China's backing.

A French official said Lagarde would go to Beijing soon.

Secretary of State Hillary Clinton, speaking in Paris, also said the United States had no official position on Lagarde, though U.S. officials have indicated Washington would back her.

French President Nicolas Sarkozy hosts an opening lunch for the 24-hour annual summit in the northern seaside resort of Deauville. It was largely sealed off from the outside world by heavy security, leaving a few hundred left-wing protesters to demonstrate in the port of Le Havre, 40 km (25 miles) away.

Bilateral meetings among the leaders of the G8 -- the United States, France, Russia, Canada, Britain, Italy, Germany and Japan and Russia -- had already begun before lunch. Sarkozy met Russian President Dmitry Medvedev, who in turn was due to meet U.S. President Barack Obama before the summit's formal start.


On the formal agenda are plans to provide aid for Tunisia and Egypt, the vanguard of the Arab Spring uprisings, with a view to fostering democracy. However, the three-month-old war in Libya and the explosion of violence in Yemen overnight may well take up more of the discussions around the summit table.

One European diplomat said leaders may agree to seek United Nations Security Council action on Yemen, where the refusal of veteran President Ali Abdullah Saleh to step down in the face of mass protests and demands from his U.S. and Gulf allies, has been followed by fighting that has raised the risk of civil war.

Russia, a post-Cold War addition to the G8 which often takes a contrary view to the seven Western powers, is opposed to the NATO bombing effort to oust Libyan leader Muammar Gaddafi. There was no immediate sign, however, of significant new moves by Moscow to try to mediate between the warring parties.

The group will condemn Syrian President Bashar al-Assad's crackdown on protesters, officials said.

Japanese Prime Minister Naoto Kan will brief the G8 on Tokyo's response to the nuclear crisis at Fukushima after the tsunami in March, part of a process of discussions aimed at improving the safety of nuclear power plants.


On the global economy, the future leadership of the IMF and efforts in the European Union to deal with sovereign debts that have pushed several states which use the euro currency into crisis, are likely to be discussed in tandem.

The Europeans, apparently with tacit support from the United States, have insisted on maintaining a convention that the IMF managing director should be chosen from Europe. The role of the global lender, notably under Frenchman Strauss-Kahn, in helping bail out Greece and other indebted EU states has been cited by European leaders as a factor in keeping the post for themselves.

However, the rising BRICS economies -- which includes Russia alongside China, India, Brazil and South Africa -- have decried the process of choosing a successor and want more of a say.

The effect of Greece's difficulties on the euro and hence on world currency markets is also a matter of concern for the non-European powers in Deauville, though European Council President Herman Van Rompuy told reporters as the summit began that the leaders were not negotiating any package for Athens.

In a statement on Thursday to answer a question about China's stance on who should head the IMF, the Chinese Foreign Ministry repeated Beijing's position that senior management of the organisation "should enhance representation of the emerging market countries and reflect changes in the world economy."

Despite France saying this week that Lagarde had Beijing's blessing, the Chinese foreign ministry said in a statement on Thursday: "China has noted that countries concerned have proposed candidates for the executive directorship of the IMF. We hope that the decision will be made through democratic consultation on the basis of these above principles."

But it did not say whether China endorsed or opposed Lagarde, or the other declared candidate, Mexican Central Bank Governor Agustin Carstens.

Van Rompuy said in Deauville of Lagarde: "We're not here to lobby. This candidacy speaks for itself. If anyone wants to talk about it, we will draw attention to all that it offers."

Russia, which has a foot in both the G8 and BRICS groups, may be the most vocal in Deauville in questioning the EU choice.