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President of the European Commission
Prime Minister Brown,
The G20 summit in London will be a milestone in the global response to the global crisis. I am very confident that, under Prime Minister Brown's leadership, it will be a success.
The initiative for a global response to a global crisis came from Europe. I would recall that both President Sarkozy and I went to Camp David to argue with President Bush for a global response. The G20 summit in Washington in November last year was the result of these joint efforts.
Europe has therefore a particular responsibility in the current G20 process. We want the London Summit to succeed. And I am sure that it will succeed!
The EU will be united in London, with a joint message, as agreed last week by the 27 Member States in the European Council. We will have a pro-active agenda for London. We want concrete results – on a stimulus for the world economy and on regulation of all financial actors, from banks to hedge funds to new rules on credit rating agencies.
We should be clear that there is no dichotomy between stimulating the economy and improving regulation. We need both. Indeed, we need to go beyond this. We need to reject all forms of economic nationalism and protectionism. And we need to reaffirm our commitment to the Millenium Development Goals.
The economic slowdown is particularly severe. So providing stimulus to the economy through supporting overall demand is necessary. The EU is already doing a lot on this front: our overall fiscal effort is close to 4% of GDP. Now we must implement our recovery plans vigorously. We know what we have to do – to get loans flowing again, to keep people in jobs and to keep and improve their skills for when the upturn comes, to continue investing in productivity and efficiency. The Commission will monitor and evaluate what Member States are doing to co-ordinate our overall response to the crisis.
On financial regulation, the EU wants to move the frontier further: no financial product, no institution, no market, no jurisdiction should be exempted from regulation. Not regulation for the sake of regulating. We need further regulation because we need markets to function properly again funding jobs and investments. Only in this way will confidence be restored. And confidence is key. Ethics in the financial system is a precondition for it.
In the EU the frontier is already moving: proposals on capital adequacy and credit rating agencies have been presented by the Commission and are currently being discussed, also by this Parliament. Over the coming weeks the Commission will table proposals on hedge funds, private equity and executive pay. And, in time for the June European Council, the Commission will put forward a package for a new European supervisory system. The EU is moving! We will say it loud and clear in London, so that we can work together with our partners, namely the United States. We want the others to move along with us, we need global rules for the global economy.
Take the case of impaired assets. Clearly, without cleaning the banks' balance sheets, credit will not flow back to the economy. The EU now has a framework, provided by the Commission, to address this issue. G20 finance ministers discussed at length the treatment of impaired assets less than two weeks ago. The set of principles they adopted largely reflects the EU views on the matter.
In London, the EU must also give a strong message rejecting protectionism. We will defend our internal market at home, keeping it open and we will work for open global markets too. We must not give up on Doha and must reach an agreement soon. Nor can we forget the countries most in need. We must stick to our commitments on the Millennium Development Goals.
And we must always have in mind that the actions we take or propose are only means to an end: improving people's wellbeing. In the current juncture this means we must cushion and mitigate the effects on employment of the economic downturn in the EU. Employment is indeed our number one priority right now. We will hold an employment summit on 7 May to mobilise ideas, funds and actions in favour of keeping people in jobs and retraining them for the jobs of the future. To this end, we are working with the social partners. This is also part of the European model. This is the way to prepare our workers for the future of the economy.
The meeting of the G20 in London will therefore have to deliver, convincingly, in quite a number of areas. I am sure that, under the leadership of Gordon Brown, the G20 will indeed deliver.