16. The EU’s engagement in the G20: how to deal with global power shifts
Vy Dang, Sven Grimm and Wulf Reiners
in: Hackenesch, C., Keijzer, N., & Koch, S. (Eds., 2024). The European Union’s global role in a changing world: Challenges and opportunities for the new leadership (IDOS Discussion Paper 11/2024). IDOS.
State of play
The European Union has been a permanent member of the G20 since the group was founded in 1999, alongside three member states: France, Germany, and Italy (EU3). Additionally, Spain and the Netherlands are regularly invited as guests to the G20 meetings. Increasing engagement within the G20 is one of the key priorities outlined in the EU’s 2021 multilateral strategy. The EU aims to enhance its influence within informal fora like the G20, particularly due to their ability to “shape and reinforce the multilateral agenda and deliver strong crisis response and concrete solutions for global problems” (European Commission, 2021a).
Building on the “principled pragmatism” concept for the EU’s external action as established in the 2016 Global Strategy, the EU’s 2021 multilateral strategy marked a shift towards a more strategic approach to multilateralism. The revised multilateral strategy has become less apologetic about promoting its interests and views multilateral cooperation as a means to reach objectives. It has departed from the “effective multilateralism” approach previously outlined in the 2003 European Security Strategy, which saw multilateralism as a goal in itself.
This strategic approach is also reflected in the EU’s engagement within the G20, particularly in the area of development policy. In recent years, (sustainable) development has been a key topic in G20 discussions, along with global health, economic recovery, Russia’s war against Ukraine, digitalisation, and climate (see Table 1). Development policy (re)gained particular prominence during India’s G20 presidency in 2023 and is expected to remain a key issue in 2024 and 2025. In response, the EU has consistently reaffirmed its contributions to global development, as outlined in statements by President Michel and President von der Leyen ahead of the G20 summits. Several EU-initiated development cooperation projects with G20 partner countries include the EU financial contributions to public climate funds and the Just Energy Transition Partnership with South Africa. At the 2023 G20 Summit in India, President von der Leyen highlighted the EU’s contributions to the India-Middle East-Europe Economic Corridor and the Trans-African Corridor through the Global Gateway, which aims to enhance critical infrastructure globally (European Commission, 2023). However, there has been criticism that these initiatives are designed to increase the EU’s visibility and counter China’s Belt and Road Initiative. This repurposing of financial assistance for geopolitical objectives could potentially undermine sustainable development goals and the values and principles of the EU, as well as increase scepticism and the loss of trust among partner countries (Dworkin, 2023).
Similar to other areas of EU external action, the EU faces challenges in effective engagement in the G20 both internally and externally. Internally, coordination is difficult because of the involvement of different institutions and divergent interests among them and/or with member states. The broad G20 agenda cannot always be easily translated into the EU’s division of competencies between the institutions and the member states. In some policy matters, member states make decisions unanimously, while in others, the Commission has a negotiation mandate. Consequently, an informal setting like the G20 puts decision-making in the EU to the test; the absence of legally binding processes and divergent political convictions among the EU3 can lead to incoherent voices.
At the same time, the EU3, with their privileged positions in the G20 club, have an interest in controlling the EU internal coordination, either through their informal meetings before a G20 summit or by dominating the EU coordination with non-G20 EU member states and institutions (Amtenbrink et al., 2015, pp. 46-47). Besides the EU’s internal challenges, the G20’s agenda is determined by the rotating presidency and can lead to dynamic discussions. This flexibility sits uneasily with the complexity of consensus-seeking in the EU.
Table 1: Key priorities for G20 discussions and EU’s political positions ahead of summits, 2021-2023
| Summit | Themes and priorities | EU’s political positions and priorities ahead of the Summit | Key topics discussed during the Summit |
| 2021, Italy |
“People, Planet, Prosperity”
|
|
|
| 2022, Indonesia | “Recover Together, Recover Stronger”
|
|
|
| 2023, India |
“One Earth – One Family – One Future”
|
|
|
Source: Authors, based on European Commission (2021b); European Council (2021, 2022a, 2022b, 2023a, 2023b)
Externally, other G20 members criticise what they perceive as “overrepresentation” by the EU, which is present at the summits with three members, presidents of two EU institutions, and, additionally, two guest countries. Yet, member states are reluctant to give up their place. Indeed, European delegations account for about 25% of the total G20 seats, even if this comes with varying agenda-setting power. Despite being granted full membership, the EU, as a regional organisation and just like the African Union (AU) that joined in 2023 with the EU’s support, cannot assume the rotating presidency (O’Sullivan, 2021).
These challenges have led to mixed results in the EU’s influence in the forum, if success is measured by the extent to which the EU influences the commitments adopted by the G20. A positive example was the G20 Summit in Seoul in 2010, when leaders endorsed the Basel III accord on international regulatory frameworks for banks, a measure strongly advocated by the European Council (Amtenbrink & Repasi, 2019). Similarly, the G20 Rome Leaders’ Declaration on global health governance aligned with the EU’s proposals for an international instrument on pandemics, as initially suggested by the President of the European Council before the 2020 and 2021 Summits. However, the EU’s influence in the G20 is much lower on matters that are internally contentious or diverge significantly from other G20 members. For instance, the European Council’s demand for global taxation of the financial sector has been consistently ignored by the G20 (Amtenbrink & Repasi, 2019). Similarly, the EU’s efforts to condemn Russia over its war in Ukraine were not successful during the G20 presidencies of Indonesia (2022) and India (2023).
Internal and external influences
The EU’s 2021 multilateral strategy is a response to changing geopolitical developments and the increasing role of emerging economies in the global arena (European Commission, 2021a). Indeed, the international order is under (re)construction. Global power shifts, geopolitical tensions between the United States and China, and diverging views on Russia’s war of aggression against Ukraine or the conflict between Israel and Hamas illustrate the struggle over defining international relations. The conflicts are part of environmental, economic, and social megatrends (Hornidge & Berger, 2023, p. 220). At the same time, the inefficiency or dysfunctionality of existing international organisations, including the United Nations (UN) and the World Trade Organisation (WTO), fuel the questioning of existing multilateral solutions.
This “gridlock” in multilateralism (Hale & Held, 2017) has opened up opportunities for the rise of informal plurilateral settings, such as the G20. Such forums are less institutionalised and constitute (self-selected) clubs of states that meet regularly to exchange views and coordinate policies. They are seen and also employed by rising global powers as a tool to gain influence in world politics where traditional powers are reluctant to cede policy space. Rather than integrating into the global governance system and its norms (“socialisation” into an existing system), country groups have created new institutions that help project their global agendas. For instance, Brazil, Russia, India, China and South Africa created BRICS (now expanded to BRICS+), aspiring to balance the influence of the G7. Other examples include the Shanghai Cooperation Organisation (SCO) and the Asian Infrastructure Investment Bank (AIIB), driven by China. The “shadowing” of traditional settings has led to competing institutional landscapes of fragmented global governance (Berger et al., 2019, p. 495).
Amidst growing global cooperation complexities, the G20 has adjusted to better address the demands of effective global governance. Founded in 1999 as an informal gathering of finance ministers and central bank governors after the Asian financial crisis, the G20 was upgraded to the leaders’ level in 2008 in response to the global financial crisis. Since then, the G20’s agenda has significantly broadened to encompass broader economic, environmental, social, development, and security issues. Particularly since 2022 – and prospectively through 2025 – the G20 has experienced some form of “Southernisation” in line with global power shifts, with Indonesia, India, Brazil, and South Africa holding the consecutive presidencies. These countries share similar development challenges and have significant economic and political roles in their respective regions. Their common background can facilitate the establishment of common understandings of global problems, which is essential for joint, and thus effective, solutions. This sequence of presidencies and the troika system provide the opportunity to prioritise Southern perspectives and development concerns for four consecutive years (Lynders & Reiners, 2022). The Russian war on Ukraine has sharpened geopolitical tensions, having put additional diplomatic challenges and profiles to consecutive presidencies of Indonesia and India. India, for its part, called for inclusiveness and better representation of the Global South in international organisations during its G20 Presidency (Dang et al., 2023). Consequently, following an approach of “differentiated inclusion” to strike a balance between manageable size, the economic and political weight of members, and global representation, the G20 enlarged permanently in 2023 with the admission of the AU.
The thematic breadth and only conservative geographic expansion of the G20 has led the group to work on its legitimacy, with subsequent presidencies creating a whole “alphabet soup” of engagement groups – from Business20 and Think20 to Youth20. This has transformed the G20 into a global governance hub that brings together governments of member states and transnational networks. Rotating presidencies also have a tradition of inviting guest countries and international actors beyond G20 membership. This setup of co-opting additional actors into the G20 processes allows for effective policymaking on specific issues or simply provides the G20 with more legitimacy (Berger et al., 2019).
Looking ahead
Key processes for the global future will be co-shaped by G20 discussions, including initiatives on artificial intelligence and climate as well as the upcoming debate about the successor of the UN 2030 Agenda for Sustainable Development and its Sustainable Development Goals. It is in the EU’s interest to acknowledge and respond to the rise of informal plurilateral fora and navigate the “Southernisation” in world politics through meaningful engagement within the group. This interest might be understood as geopolitically driven. It is, however, going beyond this, as the G20’s role as a forum for agile coordination might quickly become tested again in the case of another acute global crisis. At the same time, as a committed defender of multilateralism itself, the EU should advocate for the G20 to aim towards a rules-based order based on cooperative global governance rather than becoming a parallel structure – and thus preventing further fragmentation of the global governance system.
With the recent admission of the AU, the EU is no longer the sole non-state actor and regional organisation within the G20. This moment presents an opportunity for the EU (jointly with the AU) to push for elevating the roles and actorness of regional actors in the G20. One reform idea is to grant both the EU and AU the right to hold a rotating presidency and host a summit, which would thus enhance internal coordination requirements and agenda-setting capabilities. Such a reform could also facilitate the participation of smaller EU states (through the EU) and African countries (through the AU) and promote inclusivity in the G20. Beyond the presidency function, the roles of the EU and AU could also prospectively serve as a model to include other regional organisations with broad-based political agendas, such as ASEAN, the Association of Southeast Asian Nations.
Given the wide range of topics addressed, the EU’s engagement in the G20 requires a concrete preparation framework across various policies. A starting point for the EU is to develop a clearer definition of the EU’s priorities in multilateral cooperation, while acknowledging the importance of the G20.
At the same time, due to pressures from both outside and within, there are calls to streamline the EU’s representation in club governance structures like the G20. Proposed changes include either reducing the number of EU seats, improving coordination within the EU, or both. Consolidating the EU’s representation is currently being resisted by the EU3. The less ambitious step of a more pragmatic yet still challenging step forward would be to enhance EU coordination and present a coherent European voice in the G20. In practice, the EU can seek to gradually improve the consistency and unity of its positions in the forum on a case-by-case basis to counter criticism of “overrepresentation” by other G20 members (O’Sullivan, 2021). In any case, the strategy of a concerted EU voice needs to be used wisely. A single EU stance may seem inflexible at times and hinder the ability to adapt and develop new paradigms on contentious issues (Amtenbrink & Repasi, 2019), thus burdening the interactions with the crucial non-EU members of the G20. Beyond the leader’s summit, it is also important for the EU to seek representation systems for major engagement groups if the EU wishes to maximise its influence in G20-related processes.
With a potentially looming Trump 2.0 administration in the United States after the 2024 US presidential election, and increasing tensions over China’s industrial subsidies, trade wars may escalate in the next years; the WTO could continue to be dysfunctional; and new trade agreements could become both more difficult and more important at the same time. This situation could prompt the European Parliament’s attempt to have a stronger voice in the G20 discussions on trade-related issues, which would require the EU to carefully consider how to most effectively engage in the G20 and coordinate internally to this end.
Last, but not least: Given the growing assertiveness of non-Western countries in the G20, EU leaders must recognise that increasing their influence on G20 commitments and advancing their collective (and individual) agendas relies on stronger relationships and deeper ties with rising global powers. These countries do not always share the EU’s priorities; still, joint initiatives and global impact require closer interactions with the world beyond Europe. This challenge could be exacerbated by the electoral shift in the EU following the 2024 elections. The shift to the right and stronger national swings in several, also key, EU member states (including amongst the EU3 in the G20) influence policies with external dimensions, from trade and immigration to climate. This is likely to lead to even more polarised debates on the rationale and necessity of EU (development) cooperation, diminishing the EU’s attractiveness to international partners. Therefore, the next European Parliament and Commission leadership must ensure that the EU communicates its priorities also in light of partner countries’ interests and cooperation concepts for the implementation of global agreements that show pathways to sustainability – first and foremost the Paris Climate Agreement and the 2030 Agenda (Lynders et al., 2023).
References
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