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Brussels, 27 June 2010
From G8 to G20: Introductory remarks by President Barroso
We had an excellent G8 meeting - very informal, with candid discussions. This Summit proved that global governance is working. There was a strong willingness to understand each other and work together.
I presented the situation of the European economy. There was a lot of mutual understanding on how to bolster fragile economic growth, and recognition that the EU has reacted with appropriate and bold action.
I highlighted the main strands of Europe's three-fold action:
Measures taken to guarantee the financial stability of the EU and the euro area (stabilisation mechanism and economic governance). All agreed Europe had taken decisive action on this.
I stressed the contribution Europe was making through fiscal stimulus (2008-2010), and the need to return to fiscal consolidation (as of 2011), so to maintain confidence and growth. Nobody questioned this at all.
I explained the decisions we had taken on the stability of our banking system through disclosure of banks' positions (stress tests). This was welcomed by all.
We also had a good discussion on the Millennium Development Goals, also in the outreach session. I stressed the importance of it in view of the UN High Level Conference on MDG in September.
If we want credibility, we need accountability. The fact that we adopted the accountability report is a very important step in my view.
We have also taken an important decision at the G8 to speed up the pace towards achieving the MDGs on Maternal and Child Health. The European Commission is already very substantially engaged on these MDGs with 450 million USD a year over the next 3 years (2011-12-13), which amounts to 1.35 billion USD. We have now topped this up with another 70 million over 3 years. This brings the Commission's contribution to a total of 1.42 billion USD over 3 year (2011-12-13). We are grateful to our ACP partners for supporting this initiative. In total, the EU (27) financing for these MDGs is about 4 billion USD.
The EU is the world's first donor providing 58% of development aid worldwide (49 billion Euro / 63 billion USD per year in 2009, or close to 100 Euro per European citizen).
We now move on to the G20-Summit. I expect same spirit to continue. It is the first time we meet as premier forum for our international economic cooperation.
The EU comes united to the G20 leaders meeting. Herman Van Rompuy and I will work with our partners on three priorities in particular:
1) We will strive for a coordinated approach at global level that combines growth-friendly fiscal consolidation and following through on fiscal stimulus. Discussions in the G8 have shown that it is possible to reconcile the conceptual differences. We are hopeful that it will be possible also within the G20 to agree on coordinated gradual and differentiated exit strategies. We expect the G20 to agree on concrete targets for deficit reduction and the stabilisation and reduction of debt. We need these targets to be credible and we want them to be minimum targets.
2) We need to keep the momentum in our action for financial repair and reform. We must stick to the agreed timeframe for reform, or accelerate it. We must remind financial services of what they actually are: services for the benefit of our economies. We must make the financial sector more resilient to crises and risk, and avoid that tax payers have to bail out banks in the future. Financial sector must make a fair and substantial contribution. Europe will continue its efforts to convince partners to agree on ways to make the financial sector participate in the costs of repair, resolution and prevention. In Europe we have agreed to set up a bank resolution framework. And we agreed to introduce systems of levies and taxes on financial institutions to ensure a fair burden sharing and to give incentives to contain systemic risks. We hope to see similar approaches from our partners. And we see already positive developments from the US.
3) Thirdly, we need to strengthen the quality of bank capital and liquidity to face future difficulties. We welcome and support the progress made by the Basel committee. We are confident that in the end the amount of capital will be significantly higher and the quality of capital will be significantly improved. We urge the G20 to reach agreement at the time of the Seoul summit on the new capital framework.