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Looking back, one begins to see that Europe has spent the best part of 10 years failing to get its act together. A decade that began with ambitious plans for a European constitution ends with the fate of a much more modest Lisbon treaty hanging on a dubiously democratic attempt to persuade the Irish to alter their "no" to a "yes". If we had spent half the time we wasted in that constitutional debate simply co-ordinating our actions better, under the existing treaties, we would be in a better position today. Europe talks the talk but does not walk the walk.

Every EU member state bears some responsibility for this shambles, as does the institutional leadership in Brussels. But its three largest member states are especially to blame.

It's nothing new that France and Britain are behaving like France and Britain. Plus ça change, plus c'est la même chose. What's new is that Germany is now behaving like France and Britain.

In this constellation, neither the Americans nor the Chinese see Europe as a single, coherent partner. The G20 seems to be gaining acceptance as a new institutional framework for global collective action, at least in financial and economic policy. But it is just that: a framework. To make such frameworks work, you always need, behind the scenes, a strategic coalition of major players. Increasingly, here in Beijing as well as in Washington, one hears talk of a "G2" inside the G20. G2 means the US and China. Yet it's the EU, not China, that has an economy the size of the United States'. Especially in economic policy, the strategic coalition should be G3. But where is Europe?

Vague low-carbon language and climate change negotiations in Copenhagen in December were relegated to two paragraphs at the communique's end.

Some critics also pointed out that the summit failed to produce a co-ordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.

Brown said that the existing agreed fiscal stimulus will amount to $5tn by 2010, and the measures will raise world output by 4% by the end of next year.

The prime minister also won agreement from other G20 world leaders that the International Monetary Fund will monitor the existing stimulus,

Overall, the resources of the IMF will be trebled from $250bn to $700bn, following the lifting by the US of years of opposition. In a sign of the shift in world power, China agreed to provide $40bn of the new loans given to the IMF, with more to come from Saudi Arabia.

At the centre of the deal was a six-point plan:• Reform of the global banking system, with controls on hedge funds, better accounting standards, tighter rules for credit rating agencies, and immediate naming-and-shaming of tax havens that fail to share information.• A global common approach to dealing with toxic assets that impair the ability of banks to lend.• A $1.1tn package to supplement the $5tn stimulus to the global economy by individual countries. The $1.1tn will allow the IMF, the World Bank and others to increase lending to vulnerable countries. There will be a tenfold increase to $250bn in the IMF's facility allowing members to borrow from other countries' foreign currency reserves.• More power for leading developing countries within the IMF and World Bank, to end the stranglehold of the US and Europe on their top jobs.• $200bn of trade finance over two years to help reverse the steepest decline in world trade since 1945, with cash from a range of public and private sources.• A pledge that the fiscal stimulus, including the sale of gold by the IMF due to raise $6bn, will give help to the poorest nations and create green jobs.

Nicolas Sarkozy said the summit meant that the era of secrecy by banks was over; "great progress" had been made, he said, and the page had been turned on the economic model which had dominated since Bretton Woods in 1944 created the world's institutional framework."Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model. It's not my place to criticise it, it has its advantages [but] clearly today a page has been turned," he said.

The summit's biggest loser may have been the fight against climate change. Diplomatic sources said China led the opposition to green language in the final communique. David Norman, the WWF campaigns director, claimed that the summit had been "a huge missed opportunity".

"China is becoming an indispensable power in the 21st century in the way Madeleine Albright said the US was an indispensable power at the end of the last century," Miliband said. "It has become an indispensable power economically, and China will become an indispensable power across a wider range of issues."

"I think that there is a scenario where America and China are the powers that count," the foreign secretary said. "It is massively in our interests to make sure that we have a stake in that debate, and the most effective way of doing so is … to ensure we do it with a European voice."

A report by the European Council on Foreign Relations argued that China was exploiting the EU's divisions and treating it with "diplomatic contempt". The report, published in advance of Wednesday's EU-China summit in Prague, said that European states, dealing with China individually, lacked leverage on issues such as trade, human rights and Tibet.

"Europe has not been sufficiently strategic in its relationship with China," Miliband said. "I think a significant part of that is institutional. The EU-China relationship is a good case for the Lisbon treaty. At the moment, at every EU-China summit, the EU side is led by a different presidency and every year there's a different set of priorities.

"The Italian preparations for the summit have been chaotic from start to finish," said Richard Gowan, an analyst at the Centre for International Co-operation at New York University.

The behind-the-scenes grumbling has gone as far as suggestions that Italy could be pushed out of the G8 or any successor group. One possibility being floated in European capitals is that Spain, which has higher per capita national income and gives a greater percentage of GDP in aid, would take Italy's place.

"The G8 is a club, and clubs have membership dues. Italy has not been paying them," said a European official involved in the summit preparations.

Critics say Italy's Berlusconi government has made up for the lack of substance by increasing the size of the guest list. Estimates of the numbers of heads of state coming to L'Aquila range from 39 to 44."This is a gigantic fudge," Gowan said. "The Italians have no ideas and have decided that best thing to do is to spread the agenda extremely thinly to obscure the fact that didn't really have an agenda."

Silvio Berlusconi has come in for harsh criticism for delivering only 3% of development aid promises made four years ago, and for planning cuts of more than 50% in Italy's overseas aid budget.

The heavy criticism of Italy comes at a time when the future of the G8 as a forum for addressing the world's problems is very much in question. At the beginning of the year the G20 group, which included emerging economies, was seen as a possible replacement, but the G20 London summit in April convinced US officials it was too unwieldy a vehicle.

The most likely replacement for the G8 is likely to be between 13- and 16-strong, including rising powers such as China, India, Brazil, Mexico and South Africa, which currently attend meetings as the "outreach five" But any transition would be painful as countries jostle for a seat. Italy's removal is seen in a possibility but Spanish membership in its place is unlikely. The US and the emerging economies believe the existing group is too Euro-centric already, and would prefer consolidated EU representation. That is seen as unlikely. No European state wants to give up their place at the table..

Ali Akbar Velayati, Supreme Leader Ayatollah Ali Khamenei's top adviser on international affairs, said Western countries did not want the Islamic state to have peaceful nuclear activities, state broadcaster IRIB said on its website.

Sarkozy, upping the stakes in the dispute with Tehran, said the powers would review the situation at a G20 meeting of developed and developing countries in Pittsburgh on September 24-25.

However, Sarkozy made clear Russia was still dragging its feet over the issue and had pushed for more time before considering a fresh round of sanctions.

He pledged to reduce the US nuclear stockpile, and urged others to do the same. But as long as a nuclear threat existed, the US would retain its nuclear capability, although it would work to reduce its arsenal.

He said his administration would work to bring the Comprehensive Test Ban Treaty (CTBT) into force in order to achieve a global ban on nuclear testing. The agreement would ban all nuclear explosions for any purpose, but cannot currently come into effect as nuclear powers such as the US and China have not ratified it, and India and Pakistan have not signed it.

The most immediate and extreme threat to global security, the president said, was the possibility of terrorists possessing nuclear weapons.

"Al-Qaeda has said it seeks a bomb. And that it would have no problem in using it. And we know that there is unsecured nuclear material across the globe." Mr Obama announced a new effort to secure sensitive nuclear material within four years and break down the black market in the trade in illicit weapons.

He also said he would negotiate a new strategic arms reduction treaty with Russia by the end of this year. The speech came days after he and Russian President Dmitry Medvedev - meeting on the sidelines of the G20 summit in London - agreed to reopen negotiations about reducing nuclear warheads. They aim to produce a new arms control treaty to replace the Strategic Arms Reduction Treaty (Start) that expires at the end of the year.

"As long as the threat from Iran exists, we will go forward with a missile defence system," he said.

They want to focus on tougher regulation of the financial community. They want the summit to start re-writing the global rulebook on capitalism.

The intriguing thing is that the economic crisis and Brown's lining up with Obama, who has proclaimed his belief in the enduring "special relationship" with Britain, has revived the Franco-German alliance which used to dominate EU affairs and which had seemed to wither under Merkel and Sarkozy. She doesn't like his touchy-feely ways, he finds her incremental style of politics frustrating. They had drifted apart, but they are back sharing a political tent.

The big question on the fiscal stimulus front is: What will China do?

Brown's hope is that China, worried about the safety of its money invested in the U.S., will be ready to commit extra funds to fighting the world recession. But if he agrees to do so, President Hu Jintao will surely exact a price.

If China comes up with the money to help, it will need assurances that it will in the future enjoy greater power within such multilateral institutions as the IMF and the World Bank. The U.S. and Europe, who have dominated the G-8, now have little option too but to accept a new world order.

Whatever the outcome in London it is unlikely now that the G-8 alone will ever carry the same sway. And not surprisingly, Italian Prime Minister Silvio Berlusconi, who hosts this summer's G-8 in Sardinia, has proposed that its gathering should be immediately followed by one of the G-20.