OK, just had chats with a couple of senior UK officials, and here’s where things are at inside the negotiations:
– Lots of discussion about SDRs and IMF finance. It looks like we’re heading towards a $250bn SDR issue as part of a larger package on IMF financing; things look hopeful for getting beyond the important $500bn level. Germany has apparently been a bit difficult over the SDRs issue – they’re keen on applying a lot of conditionality. The SDR discussions were also complicated by China’s recent suggestion of ending the dollar’s role as global reserve currency, and using SDRs instead – this made the US somewhat suspicious of SDRs in general.
– A big fight is underway on tax havens. Sarkozy’s going in hard for tough language, but China is against as it’s worried about the effect on Hong Kong and Macao. Gordon Brown is looking for a compromise on that right now at the lunch. The Czech Presidency has been ‘unhelpful’.
– On trade finance, there are hopes for a pretty good package, which would then be presented as a key outcome for low income countries.
– But it looks like today’s big disappointment will be on climate change and green new deals. Both sources told me that there will be no numbers at all on green new deals, either in terms of percentages of stimulus packages, or overall dollar totals. Worse, there are real struggles underway on keeping language about Copenhagen in the communique at all. The issue here is apparently largely with China – which is reportedly worried about linking climate and the G20 process, on the basis that this would provide Congress with another platform for protectionism. Right now, all language on “greening”, “low-carbon” and “Copenhagen” is out of the communique, at China’s request.
That’s it for now. As ever, apply a discount rate to all this: this is about the time you’d expect host government officials to be lowering expectations, so that they can pull a rabbit out of the hat in about an hour’s time…