José Manuel Durão Barroso
President of the European Commission
The G20: putting Europe at the centre of the global debate
EP plenary debate on G20
Strasbourg, 24 November 2010
Before this month's Seoul Summit, there was concern that once the pressure of the crisis which brought the G20 countries together was receding, the G20 would find it impossible to fulfil its role as the primary forum for global economic co-ordination.
After this month's Seoul Summit, I can reassure you that that negative scenario was not confirmed.
We are seeing the G20 move from crisis mode to a more stable approach to global governance.
Despite the difficult issues under discussion, and the fact that some issues - like taxation of the financial sector - were not agreed, the G20 once again delivered an important message of global unity and determination. It made real and steady progress on addressing global economic challenges.
I know the results were received with some scepticism, because there was no spectacular, last-minute breakthrough, perfectly timed for the evening news.
But what the sceptics fail to understand is that the G20 process itself is spectacular news.
It is not like our more integrated process, where everyone round the table shares a common culture of negotiation. Apart from the EU and some of its Member States, the G20 includes countries as diverse as the US and China, Russia, Brazil and Japan, Argentina and Saudi Arabia, Korea and South Africa. The very fact that they are engaged in a joint process of addressing global imbalances and agreeing on, for example, financial regulation, should be recognised for what it is: enormous progress that would simply not have been possible some years ago.
The Seoul Summit was an important further step in that process and the launching of a new agenda, not a one-off spectacular event. So yes, it was a success, and I think the European Union, represented by myself and the President of the European Council, can be satisfied with the Summit conclusions. On the whole, they reflect the priorities the EU set out ahead of Seoul, and the EU should be proud of the very important contribution it is making to this process.
Let me highlight some of the key achievements.
First and foremost, the EU wanted this Summit to make progress on joint action to boost global growth and jobs, and to give answers on how to address global imbalances and currency tensions.
We all knew it would be an uphill struggle to find a commonly agreed way to tackle global imbalances. But the G20, after long and hard negotiations, opted for a cooperative solution, setting in place a mechanism and a timeline that brings all economies together to address this issue. G20 partners committed to reducing excessive imbalances, and to maintaining current account imbalances at sustainable levels.
Don't underestimate the significance of this: the G20 discussion on how to address imbalances showed that the EU is ahead of the curve. The results of our own thinking on EU internal imbalances inspired G20 leaders as the best way to tackle global imbalances.
Our method to use indicators to trigger an assessment of macroeconomic imbalances and their root causes is at the basis of the new G20 mechanism. It will be set up by mid 2011, with a first assessment before the next summit in November 2011. Our focus now will be on strengthening this mechanism as much as possible, and ensuring it is properly applied during the French G20 Presidency in 2011. The conclusions were important but now we have to see how they will be implemented.
The second achievement relates to currency rates. There will be no success in rebalancing growth without addressing currency tensions. Once again, the EU helped to build a G20 consensus on cooperative solutions. We have agreed to move towards more market-determined exchange rate systems that reflect underlying economic fundamentals. We also agreed to refrain from competitive devaluations, and to be vigilant against excess volatility and disorderly movements in exchange rates.
This resolve provides political momentum for the French G20 Presidency, that will take up a comprehensive reform of the International Monetary System.
I am also happy to see that the G20 summit endorsed the historic reform of the IMF. We have exceeded the Pittsburgh expectations on the quota shift and on the representation of emerging economies. Thanks to the open and cooperative approach of EU Member States, our significant concessions and our ability to share responsibility means that the Fund now has the legitimacy it needs to take on the challenging tasks ahead - in particular addressing imbalances and currency tensions.
Emerging economies now have to prove that in return for increased representation they are willing to shoulder increased responsibility for global economic governance.
A fourth achievement at this Summit was keeping up the momentum for global financial regulatory reform, with a clear focus on implementation.
We welcome the endorsement of the Basel III reform, and that the G20 will continue to work on systemically important financial institutions. The G20's financial reform efforts will continue in areas like macro-prudential policy frameworks, shadow banking, commodity derivative markets, and market integrity and efficiency. The EU is in the lead on many of these points and our internal work will feed into the G20 process.
It is now important to ensure strict and consistent implementation of all these commitments, according to the agreed timetable, to ensure a global level playing field. We have received strong assurances from the US that they share our determination on this.
The Seoul Summit also created new momentum to conclude the Doha Round, and reiterated the G20 commitment to fight protectionism in all its forms.
An achievement which gives me personal satisfaction is that, with the Seoul Development Consensus - interlocking development, trade and investment - we have firmly placed development on the G20 agenda.
This new, growth-oriented approach will complement existing, donor-focused activities and the UN system. It will boost our efforts to achieve the Millennium Development Goals. And it is perfectly in line with the Commission's recent proposals in its Green Paper on the future of development policy. This Green Paper is now open for consultation and I look forward to input from this House.
Finally, I strongly welcome the G20's commitment to the G20 Anti-Corruption Action Plan; to future work on energy-related issues; and to spare no effort in reaching a balanced and successful outcome at the climate negotiations in Cancun.
Mesdames et Messieurs les députés,
L'intérêt croissant que manifestent les représentants des entreprises et des syndicats prouve bien que le processus du G20 s'est maintenant imposé comme le grand forum de la coordination économique mondiale. J'ai participé au sommet du monde des affaires, le G20 Business Summit, où j'ai souligné l'importance de la responsabilité sociale des entreprises.
J'ai également reçu une délégation de syndicats d'Europe, d'Amérique du Nord et du Sud, et d'Asie. Avec cette délégation, qui était "emmenée" par la Confédération Européenne des Syndicat, j'ai convenu de la priorité à donner à l'emploi et souligné que l'Europe proposait effectivement l'intégration de l'emploi et de la dimension sociale dans les conclusions.
Après Séoul, nous avons le regard tourné vers la prochaine présidence, et le sommet de Cannes en novembre 2011. Nous devons saisir cette chance d'avoir un de nos États membres dans la cabine de pilotage. Nous devons nous positionner sans attendre et contribuer activement, de façon coordonnée, à façonner l'ordre du jour du G20.
La Commission est prête à soutenir pleinement la présidence française dans toutes ses priorités. L'une de ces priorités est la réforme du système monétaire international, pour laquelle nous devons réunir une série de propositions cohérentes pour, notamment, améliorer la stabilité et réduire la volatilité des taux de change. Une autre priorité concerne la volatilité des prix des matières premières. La Commission présentera une contribution sur les marchés primaires - matières premières de toutes natures - dans les prochains mois.
Considérons la présidence française comme une occasion unique à saisir pour permettre à l'Europe de marquer l'agenda mondial de son empreinte. Si nous continuons à agir ensemble au G20, l'Europe consolidera sa position au centre du débat économique et financier mondial, et jouera un rôle clé dans la réponse aux défis mondiaux.