José Manuel Durão Barroso
President of the European Commission
Statement of President Barroso at the start of the G20 Summit in Seoul
Joint press conference with President Van Rompuy at the start of the G20 summit
Seoul, 11 November 2010
I am very pleased to have arrived here, together with President Van Rompuy, in the Republic of Korea for the G20 summit. Korea and the European Union are strategic partners and like-minded friends. I want to thank President Lee and all citizens of this country for hosting this summit. This G20 summit will be the first summit hosted by an Asian nation and non G-8 country.
The European Union comes to this summit with ambition and realism.
This summit is a credibility test. The G20 brings together the most important global economies. To have all of us meeting and discussing on a regular basis is in itself an important achievement. The question is how far we can go at this Summit to agree on joint action so we can boost global growth and jobs. As we said in Pittsburgh: we need to promote quality employment. Quality employment should be at the heart of the recovery. Today, the economic situation is better than in late 2008, when we launched this G20 leaders’ process. The growth prospects have improved, but recovery is uneven and unemployment is still very high. Therefore, growth and jobs should be at the centre of our concerns.
We have to accelerate and rebalance growth in a way that it is good for all. The G20 is delivering on this. We are exchanging information and engaging in mutual assessment. Now we need to go further and implement the framework for growth. The G20 has prevented the boat from sinking. We now have picked up speed, but not all engines are running on full power. The G20 must show that it is indeed the premier forum for global economic cooperation.
In particular, the G20 must tackle imbalances decisively. All major economies must to do their part to achieve rebalancing. And in doing so, they should consider the consequences of their action or in-action on other countries. We need to develop and use effective tools to detect, assess and reduce excessive imbalances.
I do not believe that mechanical, one-size-fits-all numerical targets are the answer to this challenge. But I think indicative guidelines could help to address large imbalances and trigger a more in-depth assessment of their nature and the root causes of impediments to adjustment. This issue is familiar to Europe. We are indeed in the process of adopting a robust mechanism to address macro-economic imbalances inside the EU.
In this context, it is important for all partners to move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.
Nobody should seek growth for its own sake at the expense of others. This would lead to a race to the bottom. The task of the G20 is to avoid that from happening.
If there is one thing we have learned from the economic and financial crisis, it is that the real economy should be our reference point. In the G20 we should work together towards a stable and well functioning international monetary system.
In all this, the role of the IMF is crucial. Europe wants a more legitimate and effective IMF, and that is why we have made the agreement on the reform possible. At the same time, this reform must not stop here, but must be carried further.
An area where the G20 has definitely made important progress is financial reform. It deserves our continued attention. Out of the commitments made at the Washington Summit, we have delivered on almost all of them. We have come closer than ever before to our aim of not leaving any market and any product unregulated. But we are not yet there, and the EU will make sure the G20 keeps up the momentum. It is crucial for world economic growth to have a financial sector that we can trust.
On development, we are very glad that development figures on the G20 agenda for the first time. In fact we have welcomed and supported this idea of the Korean presidency. It complements our development approach with a new paradigm linking development with growth, trade and investment. The emerging economies have shown how countries that for long were not considered as boosters for growth have now become major drivers. So I believe indeed the G20 should look beyond its confines and see what it can do for the wider world.
If we are serious about boosting growth and development, we have to be serious about stimulating world trade and rolling back trade restrictive measures. We should continue to fight all forms of protectionism. And we should all commit to a rapid conclusion of the Doha Trade and Development talks. Doha can become a significant source of growth and development in times of limited budgetary resources. We have said year after year that next year is the one to conclude Doha. I hope this time it will be true. What we need now are clear and concrete signals from all of us that we are seriously engaging in the Doha end game. The EU is ready for it.
Finally, the G20 must not waver in their efforts to come to a more sustainable management of our resources and a greener economy. I expect this summit to give a strong political signal for real progress in Cancún in the global fight against climate change. Subsidies for fossil fuels must be gradually withdrawn. We also must continue our efforts to reduce the price volatility of oil and other commodities. Given the importance of energy for each of our economies, this is not a small change that can be done overnight. It is a strategic choice that needs a comprehensive approach. This is what the EU is embarking on. This week, we are presenting an Energy Strategy for the EU with a 2020 perspective. This will benefit both energy security and efficiency and the fight against climate change. This is a very important contribution to global energy security:
Europe is delivering. We are carrying out the agreed G20 reforms. For example establishing a new financial supervision system from 2011, regulating derivatives, making credit rating agencies more transparent and supervised, creating a bank resolution framework, introducing levies and taxes on banks. Just today the European Parliament will cast its final vote on a new European law regulating hedge funds and private equity (so-called Alternative Investment Fund Management directive). Step by step we are wiping out the remaining blank spots in the financial markets.
And Europe is engaging. The European Union comes to this summit fully playing its new role at the global stage. Herman Van Rompuy and myself come here representing the position of the EU and its 27 Member States and engaging our partners in a cooperative approach.
Cooperation not confrontation must be our motto. The G20 is not a war game, not even a war of words game; it is a team play for the benefit of citizens around the world.