Obama in Europe: High stakes economic diplomacy

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As Barack Obama prepares to meet with his G-20 counterparts, it's clear that creating agreement about the best path for economic recovery will be an uphill battle. French President Nicholas Sarkozy has publicly stated that he will "walk away" from the table if he doesn't get the increased financial regulation that he wants, Germany's Angela Merkel has said that Germany's declining population makes deficit spending dangerous, and Czech Prime Minister Mirek Topolanek referred to Obama's stimulus plan as "the road to Hell."

All in all, it's shaping up to be a tough week for Obama, and some analysts have already begun grumbling darkly about the clash of personalities that is supposedly brewing in London.

Obama has a pretty daunting agenda to push. He wants to convince his counterparts to increase direct stimulus spending. While many European countries have already announced stimulus plans, the continent's four biggest economies are investing one percent of their GDP; the United States, by comparison, is spending two percent, and China is spending 3.2 percent.

For their part, European and Asian leaders want the United States to take a stronger hand in regulating its financial system. In many ways, however, heavy governmental regulation runs counter to both America's history and its philosophy. Franklin Delano Roosevelt, arguably the most economically intrusive president, was accused of being a "class traitor" and even a communist for his economic reforms, and political candidates often place American individualism in opposition to governmental control. As the chorus of complaints from Wall Street (and the Chicago Mercantile Exchange) have demonstrated, financial regulation is still a tough sell.

Europe, on the other hand, has a much richer history of state-run economies, and many of its leaders have already criticized U.S. Treasury Secretary Timothy Geithner for not going far enough in his regulation of American business.

The biggest danger of meetings between heads of state lies in their greatest strength: the power to get things done. On the one hand, Presidents and Prime Ministers are among those few beings who are truly able to make decisions and allocate resources. For many of them, the buck does truly stop at their desk, and they can make things happen without submitting forms in triplicate, waiting on advisors, and generally dealing with the bureaucratic grind that makes most governmental interaction incredibly tedious.

On the other hand, that power also makes it possible for them to close the doors on discussions and shut down avenues of inquiry. If a world leader says no, then the answer stands; there is often no avenue for appeal.

In the case of Nixon's first trip to China or the Camp David Accords, meetings between heads of state have proven immensely productive. On the other hand, Woodrow Wilson's performance at Versailles demonstrates that, in the hands of a leader who is ill-prepared (or just plain ill), high-level meetings can be completely disastrous.

If past history is any guide, President Obama will arrive at the meeting well-prepared and with a considerable depth of knowledge about the policies and economies of his fellow heads of state. Further, he will undoubtedly benefit from the personal charm and charisma he honed as a community organizer. However, it remains to be seen if his popularity, personality and preparation will be enough to convince Europe to join him on a path that they don't really want to follow.

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