This is not the way that Nicolas Sarkozy would have wanted it. To be welcoming the G20 heads of government to Cannes should have been the crowning event of his presidency, the opportunity to give a little credence to the grand slogan of the office, 'New World, New Ideas'.

A week ago, Sarkozy would have been cautiously optimistic about the summit’s prospects, with EU leaders having agreed a package of measures to secure the future of Greece in the Eurozone. Markets rallied and Europe’s politicians breathed a sigh of relief.

Little did they know that Greek prime minister George Papandreou was suddenly to drop a bombshell, proposing on Monday this week to hold a referendum on the package proposed to resolve the crisis. This announcement, the frenetic analysis of what the referendum will mean for the future of the eurozone and Greece’s membership of it, and debate about the precise framing of the question that will be posed to the Greek people have sent markets plunging again and filled airtime and column inches all week.

As Papandreou was summoned to Cannes for a meeting with Angela Merkel and Nicolas Sarkozy on the eve of the summit, his government seems to be in danger of falling apart back home in Athens, with Finance Minister Evangelos Venizelos stating that he is opposed to a referendum and with reports of PASOK MPs defecting. The latest EU and IMF bailout tranches could also be withheld if a referendum is scheduled.

The essential problem is that the G20 is ill equipped to assist with any of this.

The fact that a country of 10 million inhabitants, the world’s 32nd-largest economy, may put the whole of the 17-country eurozone at risk, and could thereby endanger the fragile recovery of the world economy, demonstrates the political weakness of our European and global institutions. While the leaders around the G20 table may be powerful in their own national environments, their ability to do anything in Cannes to solve the problems posed by Greece is very limited. The best that can be expected is for representatives of the EU institutions, and the EU member states present in Cannes, to reassure their counterparts from the rest of the world that the problems the EU faces can be solved.

Barack Obama can make the right noises about the EU but his actual scope for influence is rather low. Furthermore, with his own political future on the line in 2012, and a presidential election in France too, some of the crucial players in Cannes will be busier determining how their statements will play to national audiences than setting out long-term plans for the world economy.

The G20 lacks either the financial clout of the IMF or the collective and legal policymaking apparatus of the European Union, prompting calls by political scientist Henning Meyer and others for the G20 to learn from the EU and adopt some more formal procedures to ensure its members adhere to their commitments.

As if all of that were not problematic enough, the EU’s own role in the G20 is one of considerable ambiguity and has been since the group’s formation in 1999. The European Union as a whole is a full member of the G20, while France, Germany, Italy and the UK are individual members. Spain (the world’s 12th-largest economy) has also been asked to attend, and the Netherlands (16th) took part when Canada was in the chair. For the EU institutions to be represented by one individual would of course be too simple: instead both José Manuel Barroso (president of the European Commission) and Herman Van Rompuy (president of the European Council) attend.

These ambiguities and contradictions in the EU’s representation in the G20, together with the EU leaders’ relentless focus on Greece, will mean that the one potentially meaningful debate that could take place in Cannes will scarcely get a mention – the question of whether to introduce a financial transaction tax (FTT).

While the European Commission (in Barroso’s State of the European Union address) has been keen on the idea, the UK has been considerably more reticent, fearing the impact such a tax would have on the City of London. With both the UK and the EC represented in the G20, there will be no coherent European position on this matter and, with the Greece issue as convenient cover, there’s little prospect of any advance on that potentially vital front.

Jon Worth is an associate fellow at IPPR.

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IPPR has commissioned a series of original articles to mark the 2011 summit of the G20 (Group of 20) countries in Cannes, France. We have asked representatives from participating nations for their take on the priorities and perspectives that should underpin the summit's agenda.