President of the European Commission
"The G 20 –
a unique opportunity"
Pre G 20 press conference
Brussels, 31 March
- The G20 will not end this crisis overnight. But it
can, it must, it will, make a difference.
- For the first time ever in an economic crisis, the world is working together
– and not against each other. The European Union is leading by example.
- There is convergence around the EU's common position. We have a unique
opportunity to re-shape globalisation.
- We are building on our long experience in Europe of cross-border
cooperation, transnational and indeed sometimes supra-national rules. We are
also making full use of our social market model.
- The key to recovery is boosting global demand. Demand means jobs. And jobs
are our first priority.
- I believe this summit will be judged on five main aspects. First, the
world-wide coordination of fiscal stimulus . Second, to create
lasting demand, we need a confidence stimulus. This requires a very ambitious
reform of financial markets. Third, we need a global
governance stimulus, to reflect the 21st century world. Fourth,
we need a trade stimulus. Fifth, we need a development and climate change
stimulus. There can be no recovery without fairness vis-à-vis the
developing countries and coherence with our fight against climate
- So when we speak about stimulus I believe it is important to have this idea
– it is a stimulus in terms of demand, a stimulus of confidence, a
stimulus of global governance, a stimulus to trade and a stimulus to development
- In Europe our fiscal effort is over €400 billion. It will rise to
nearer €500 billion. The priority is now to implement the discretionary
part of it quickly, and in full. We must focus on implementation, focus on
- Comparing the size of new spending programmes and tax cuts is not the way to
measure the response to the crisis.
- We have to judge the effectiveness of the stimulus on outputs, not inputs.
What matters is results. What matters in the medium term will be jobs saved and
jobs created. This is our first concern now. And our actions must leave us
better placed for the future, through smart investment in greening and new
technologies, smart green growth.
- We saved millions of jobs in the EU through rescuing banks. That action was
not designed to help bankers, but to prevent a chain reaction of bankruptcies
and redundancies many times worse than what we have seen.
- Every economy is different. In Europe as well, we have some differences and
we are different from our major partners. So we have to adapt the instruments to
the different national circumstances.
- I believe we need to invest now, that is why we need to spend, but we need
to be able to pay the money back.
- Taking on unsustainable debt would damage all our futures. The G20
conclusions must also reflect the consensus on the need for fiscal
- I think in a time of crisis we must be responsible and not forget the most
important medium and long term challenges. The problems will not disappear.
Climate change has not disappeared because of this crisis, and the needs of the
developing world indeed are increasing.
- So I think we need a strong commitment from the G20 for success to a global
deal in Copenhagen, and also to keep our commitments regarding the Millennium
- I also believe that this crisis offers us an opportunity for investment in
smart green growth. The world should also target its investment on the low
carbon sectors of the future, as we are doing in Europe.
- The fiscal stimulus can only work if we get banks lending again. The EU and
the US are both moving forward on removing so-called "impaired assets" from
banks' balance sheets. The London summit will endorse the global framework and
global action agreed by Finance Ministers of the G20. That agreement to large
extent reflects proposals put forward here in the European Union, proposals made
by the European Commission.
- But supply of credit is only part of the story. We need demand for credit.
From companies who want to create jobs and keep jobs. Families who want to buy
homes. Sustaining demand requires this fiscal stimulus. But equally important,
it requires trust in the financial system.
- That is why more regulation, effective sensible regulation, is essential.
Not to suffocate financial markets, but to resurrect financial markets. Because
we know there is a problem of confidence in those markets.
- We must put ethics back into the system. Markets only work if rewards are
based on long-term success.
- The EU was the first to act. For example on credit rating agencies, on
capital requirements, on deposit guarantees. The Commission will very soon take
action on hedge funds, private equity and remuneration.
- I am pleased that last week our American partners and friends also announced
their intention to come with with proposals on capital requirements and hedge
- The challenge for the G20 is swift, coherent and global implementation of
financial market reform.
- That is why I believe the G20 should make specific commitments on capital
requirements, hedge funds, credit ratings agencies, accounting standards and on
- We also want action on tackling tax havens and uncooperative jurisdictions.
I welcome recent positive moves by several countries. We also need sanctions
with teeth, to protect not only EU taxpayers but also developing countries - who
are deprived of crucial tax revenue.
- International financial institutions must be more effective, more
representative and better resourced. We must massively increase IMF resources to
help economies in difficulty. The EU will, as was agreed at the European
Council, provide 75 billion euros more – 100 billion dollars.
- The G20 must give the Financial Stability Forum and the IMF stronger
- The FSF must include all G20 members, including of course the Commission, as
was already agreed. It must work with the IMF to provide early warnings of
emerging macroeconomic and financial risks. And take early action to tackle
- We need colleges of supervisors for major cross-border financial firms.
Swift decisions in Europe, based on the conclusions of the report which I asked
the de Larosière group to present, can help us drive the global effort on
supervision. The Commission will make detailed proposals to the June European
Council. I am happy with the good overall reaction that was given to the de
- The question of representation – and responsibilities – in the
IMF is important. Representation in international institutions must reflect
reality, not history. Emerging economies must have an equitable stake. EU Member
States will have to be flexible on how this is achieved.
- There can be no recovery without free and fair trade. The G20 must again say
three important words loud and clear: no to protectionism.
- We must move ahead with the Doha talks, which could boost the global economy
by at least 150 billion dollars per year.
- Of course, developing countries must not pay the price of a crisis created
in the developed world. The London summit must pledge to meet the Millennium
Development Goals. As you know, the EU is proposing a global instrument for
trade finance. We must provide additional support to help the poorest countries
through the crisis.
- I believe the best way to respond to this crisis is not to go for
"de-globalisation" On the contrary, what we need is "re-globalisation" We need
better globalisation, based on values. Globalisation that is able to follow
developments in the economic, technological and financial sectors, with global
rules, global principles.
- In Europe, we are well equipped to make proposals for this kind of
- I am happy to tell you that EU has defined a common message for this G 20
summit. That is what we did at the latest European Council. It is a message that
can and will engage our partners, for the sake of citizens' jobs and prosperity,
here in Europe, but also