Far from being doomed to failure, as widely reported in Britain, this week's G20 summit appears to be assured of success. Many of the substantive decisions have already been agreed and Thursday's three-hour summit will be less of a negotiating session than a ceremonial endorsement of action already under way. According to people closely involved in the preparations, agreement has been reached on all the main issues on the agenda. These can be divided into four: saving the world economy from collapse with fiscal and monetary stimulus; saving banks from collapse with government financial support; saving vulnerable countries from collapse with help from the International Monetary Fund; and saving the global financial system from another crisis after the present one is past.

Success on the first issue - supporting macroeconomic growth with fiscal and monetary policy - was unexpectedly confirmed over the weekend, when the German media published a leaked draft of the London communiqué, in which the G20 leaders committed themselves to a fiscal stimulus of $2 trillion (£1.4trillion) this year. Most of this extra money has already been approved by national legislatures or announced by government leaders; almost none has yet been spent. Described as “the biggest tax cut in history” by both Gordon Brown and Angela Merkel, it should provide a considerable boost to the global economy, with the main impact coming through after a six- to nine-month time lag. The summiteers expect the fiscal boost to add 2 per cent this year to global output and to preserve about 19 million jobs that otherwise would have been lost.

Although the German leak about stimulus plans was viewed as an embarrassing gaffe by the media, it was actually quite helpful to the G20 “sherpas” preparing for the London summit. The estimated figure of $2trillion should end the debate over stimulus numbers inadvertently launched by Larry Summers, the White House chief economist, which has distracted from much more important issues.

In addition, the G20 countries have been unexpectedly successful in co-ordinating their interest rate reductions and monetary stimulus measures. Rates have been slashed in almost all developed countries - and after the further half-point cut that the European Central Bank is expected to announce on the day of the London summit, all of the G7 advanced economies in the world will have adopted a near-zero interest rate regime. Such a policy would have been inconceivable in the eurozone and even in Britain a few months ago. Even harder to imagine was that the monetary authorities would co-ordinate their actions as closely as they have, with the British, US, Swiss and Japanese central banks all announcing within a space of three weeks that they would start “printing money” to allow their governments to finance higher borrowing at zero cost.

Partly as a result of this monetary co-ordination, there have been no disruptive fluctuations among leading currencies since the end of last year. The upshot is that a vicious circle of competitive devaluations and protectionist counter-measures has been avoided, at least so far.

With the main tasks of fiscal and monetary co-ordination largely accomplished, the G20 discussions this week will focus on three other issues - stabilising weak banks, stabilising weak countries and stabilising the global financial system as a whole.

Stabilising banks has been the most urgent challenge facing all G20 governments since the collapse of Lehman Brothers last September, but there is now cautious optimism about this part of the agenda for the first time. In Europe and Britain, government-backed recapitalisations, guarantees and insurance schemes appear to have convinced investors that all of the big banks are secure. But market prices indicated much greater scepticism about the US Government's ability or willingness to support Citibank, Bank of America and other financial groups. With the US Treasury last week announcing details of its schemes to buy up toxic assets, these doubts have lifted and, assuming the improvement in market sentiment is maintained this week, President Obama should be able to tell the summit that the US banking system is more or less secure.

Less progress has been made in stabilising the countries hit hardest by the credit crunch. So far, only Iceland has suffered a total collapse of public finances, but several other countries, including Ukraine, Latvia, Estonia, Hungary and Romania, are teetering on the brink. Ireland, Greece, Portugal and Austria are also vulnerable and the eurozone as a whole would be badly shaken if any of its members were unable to refinance their debts. The summit's main response to the challenge of government insolvencies will be to boost the resources of the IMF by $250 billion. But it is far from clear whether this will be sufficient to bail out the many vulnerable countries on the periphery of Europe. It is even more doubtful that the IMF will turn out to be the right institution for resolving financial imbalances and political tensions within the eurozone and the EU.

The final agenda item is long-term regulatory reform - and here, again, there has been surprising progress. Several reforms in global financial regulation are close enough to agreement for decisions to be possible at the summit. They include new arrangements for supervising all financial institutions large enough to pose risks to the global system. Financial institutions will be regulated on the basis of their market impact and not just on their legal form - whether they are classified as banks, brokers, insurance companies, hedge funds and so on. Not only will all institutions be subject to much closer surveillance, but a “college of regulators” will be established to co-ordinate the national supervisors responsible for different aspects of multinational financial firms. Bank regulators have also agreed to revise capital and accounting rules that have inflated the booms and busts, by exaggerating bank profits during economic upswings and then forcing banks to hoard capital when the economy turns down.

Finally, a new approach to tax havens has been broadly agreed. Switzerland, Austria, Singapore, Hong Kong and Luxembourg are expected to accept new rules on information sharing. Meanwhile, Germany and France, which would have liked to extend these measures into a general assault on all forms of “unfair tax competition”, have not tried to put minimum tax rates on to the G20 agenda. Germany may well demand an end to tax competition within Europe as a pre-condition for any financial help it has to offer struggling EU economies in the months ahead.

Any such attempt by Germany - and probably France - to impose pan-European tax rates in exchange for financial assistance would meet strong opposition not only from Ireland and other tax havens, but also from Britain. But the G20 sherpas have been careful to steer clear of this problem - it is a European family quarrel that can be left for another day.

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