The Arab Spring of popular uprisings in North Africa and the prospect of them spreading further east has kindled hope across the Western world.

In addressing how to ensure this fragile budding of democracy grows into the institution-building necessary for peace and stability, the G8 leaders, whose countries account for 80% of the world’s gross domestic product, revealed that the hope is tempered by fear of the consequences of failure.

Aid packages for the aspiring democracies in Egypt and Tunisia announced at the G8 summit meeting in Deauville are not new money.

The US has already announced $4 billion in debt write-offs and finance for infrastructure and attracting jobs.

The EU is considering a multi-billion euro package of aid but under a reformed funding programme that will tie payments to democratic reforms.

The age of democracy in North Africa coincides with an age of austerity, not only in Britain but in the US and particularly in the EU countries whose collapsed economies remain dependent on life support. That means aid packages have to be sold to the folks back home who are seeing public services cut while prices rise.

The rhetoric, while fulfilling the requirement to rousingly endorse democratic principles, therefore contained a warning of the danger of failing to support the fledgling freedoms. In David Cameron’s blunt words: “We will help you in all the ways we can because the alternative to a successful democracy is more of the poisonous extremism that has done so much damage in our world.”

Democracy, for all its heady possibilities, is unsustainable without the institutions that support it. An effective legislature depends on an electorate confident that their politicians are accountable and not corrupt.

As Kofi Annan, former Secretary-General of the United Nations, has warned, change has to be managed to be effective. In a country where political parties were discouraged, those who have succeeded in the peaceful overthrow of an autocratic rule, risk having the momentum hijacked by others who do not share their ideals but have the organisation to put their own agenda in place. With Egypt currently run by the army, the dangers of creating a power vacuum are obvious.

The test of the G8’s new mandate for security and development issues will be its ability to bring economic stability to Egypt and Tunisia, with an even tougher challenge ahead if Muammar Gaddafi is successfully removed from power in Libya.

The momentum for regime change that toppled Hosni Mubarak in Cairo and Zine al-Abidine Ben Ali in Tunis came largely from young men frustrated at the lack of jobs as food and oil prices continue to rise. Stability will require a fast and effective jump-start for these Arab economies, which are both suffering considerable loss of tourism revenue as a result of the uncertainty. That has been compounded by situation in Libya which has seen tens of thousands of refugees fleeing to Tunisia.

The European Bank for Reconstruction and Development, created in 1991 to support the countries of the former Soviet Union and Eastern Europe, is expected to extend its reach, lending to Egypt and Tunisia and President Obama has asked the World Bank and the International Monetary Fund to produce blueprints to stabilise and modernise their economies.

The problem is that this takes time even when orchestrated by the world’s most practised operators. And turning the hopes and dreams of the Arab Spring into a summer of stability will require the old guard of industrialised nations to learn new tricks.

The experience of the most recent attempts at nation-building: in Iraq and Afghanistan has been chastening. Yet both Egypt and Tunisia have an educated potential workforce, which was a significant factor in the peaceful revolutions in which the internet and mobile phones were weapons of mass communication.

That makes them very different propositions from Iraq and particularly Afghanistan.

For a relatively small investment (Tunisia has estimated it needs $5bn a year for five years) the world’s richest countries could underpin democracy in a way that makes it likely to spread in a volatile region. They have a selfish interest in doing so. Without stability, the number of displaced persons and refugees will increase and cause additional pressure on the struggling economies of southern Europe, which are still relatively young democracies.

Young protesters in Spain have already taken their cue from those in North Africa.

The EU in proposing new rules that would tie aid packages to democratic reforms has made a significant change of course on policy that is one of the unforeseen effects of the Arab Spring. Making economic support and trade and travel benefits dependent on structural reform is an overdue recognition that supporting stability over change effectively propped up autocrats.

What is true of the countries around the Mediterranean and on the eastern borders of the EU is also true of the Third World. We have been slow to use aid to promote democratic institutions and economic trade in addition to humanitarian help but they need not be separate aims. Too many 20th century democracies founded on hope and trust have been brought to ruin by autocratic rulers or political corruption. Democracy, by its very nature, cannot be imposed from outside but must be rooted within a society until it becomes part of the culture. There is an immediate need for honest and effective leadership but even then support is necessary.

Now that the role of steering the global economy is shared among the wider group of G20 nations, French officials considered whether it was worthwhile holding a G8 summit at all this year. That is measure of how the balance of power is shifting from the Western powers to the new economies but in Deauville, the classiest of old money French seaside resorts, the old powers, in recognising that the ideal of freedom and democracy, though a powerful force for change, is fragile and needs to be nurtured, have identified one of the key levers to the geopolitical power struggle. It is time to use it.

l David Pratt is back next week.