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G20/economy

Published on November 19, 2014
Introductory remarks by M. François Hollande, President of the Republic, at his press conference (excerpts)
Brisbane, November 16, 2014

Hello ladies and gentlemen.

Over the past 48 hours, the summit here in Brisbane has been held, focusing essentially on the economy, growth and environmental issues, although clearly other subjects may have been discussed alongside the meetings of the 20 [member states].

GROWTH/INVESTMENT

What were France’s goals at this G20 summit here in Brisbane?

The first was growth, to ensure we can persuade our partners to better coordinate economic policies; to ensure that investment, particularly in new technologies, is promoted by the main countries, the ones accounting for the bulk of the world’s wealth; and to open up markets, through a more dynamic trade policy and treaties that should be part of a multilateral framework, even though discussions have been embarked on between Europe, the United States and other countries, just as there are bilateral agreements involving a number of countries present at the G20 summit.

Finally, to make growth stronger, it was important for there to be actions decided on by Europe in particular, and especially the investment plan that Jean-Claude Juncker again mentioned at this summit.

A lot was also said and done – I hope for the coming months and years – for infrastructure: transport infrastructure, technological infrastructure and digital infrastructure.

So the first goal I wanted to include in the framework of this G20 meeting – growth – was agreed on, and it was a shared goal. A figure was mentioned in the communiqué: to ensure that all the concerted actions that I’ve just described – investment, the coordination of economic policies, support for demand in countries with surpluses, structural reforms in countries that must improve their competitiveness, as is the case of France, and opening up markets – if all those actions are carried out swiftly, it would then be possible to lift the growth that is forecast today by 2%. 2% more. 2% more global wealth. 2%, which would enable even more jobs to be created and even more wealth to be shared.

FINANCIAL REGULATION

There was a second goal I wanted to pursue on France’s behalf, and fortunately I wasn’t the only one, namely the goal of financial regulation – which had, incidentally, been the grounds for creating the G20 in its present form –, to ensure that the crisis, if there’s to be a new crisis, isn’t a burden on taxpayers. When a bank experiences this difficulty, hitherto it’s been taxpayers who have really picked up the bill. That’s what has occurred, sadly, from 2008 until today. States have funded banks’ bad habits, shortcomings and failures, and the consequence of this has been to aggravate public deficits, increase so-called sovereign countries’ indebtedness and maintain the crisis.

Europe anticipated that from this G20 summit onwards, when there’s a bank crisis, a failure of a financial institution, it will no longer be taxpayers who are called on to show solidarity – that’s over – but bank shares and banks themselves. Showing solidarity. It’s a considerable achievement which doesn’t forearm us against future crises, doesn’t guarantee us that no financial institution will ever go bankrupt, but which for a long time – I don’t dare say forever – protects European taxpayers – banking union had already ensured this –, taxpayers worldwide and necessarily French taxpayers.

There was even a reinforcement of these regulations because, on finance, there was an agreement that what’s called shadow finance – that which isn’t always declared or which takes refuge in havens – should also be dealt with, and also that institutions can be better supervised.

TAX AVOIDANCE/EVASION

France had a third goal – that’s why, along with Europe and a good number of countries, we reached an agreement in the G20 framework –, namely the fight against tax evasion and tax avoidance.

If you want to tame finance, you have to supervise it, you have to prevent it being taxpayers who pay when it fails. You also have to combat tax havens, tax optimization and tax evasion. The G20 took some important decisions.

First of all, automatic exchange of information. This means states can and must now communicate whenever there’s a request, whenever there’s a doubt, concerning an institution, a company or an individual.
As you know, there was a meeting a few days ago in Berlin which spurred 51 countries into action and set itself this automatic exchange of information as a principle. Thanks to what we’ve decided, the G20 will make sure to increase to 90 the number of countries involved in automatic exchange of information by 2018.

You’ve also learnt, like many people moreover, that tax optimization practices have developed. This means companies and even banks seek to find out where their profits can be handled best, and some countries have organized themselves to offer them this optimization in advance and with guarantees. (…) It will no longer be possible to have this method, which is ultimately a form of distortion of tax competition. There will be a form of harmonization so that each country can indeed determine its tax rates – the decision whether or not to impose a tax or set its rate is a matter of sovereignty –, but there will no longer be those optimization practices, which have profoundly disrupted the siting of certain activities.

Likewise, there will be tax harmonization of patents: many would like that, because forms of tax avoidance were organized via patents and countries had moved into that area in order to attract a number of company headquarters or investments.

The third goal was the fight against tax evasion, the fight against tax avoidance, the fight against tax optimization. This goal was broadly achieved, although there will still be more to do, because on these tax regulation issues – and it’s also true for financial regulation – no rules can be regarded as definitive. (…)

TRADE/TRANSPARENCY

We also had a discussion with the American President and a number of European countries about trade agreements, and I emphasized the key objective of transparency.

It’s important for there to be more trade, more investment, even though certain sectors must be looked at closely. You’re aware of the importance I attach to cultural exception and product identification issues, particularly in the agricultural sphere. If we wanted this discussion to continue and go ahead under proper conditions, it was right for them to be transparent and clear, so that the public can be informed of them and everyone can be persuaded, particularly the respective parliaments: the European Parliament, which will have to know about them, and the United States Congress, which will have to take its decision.

CONCLUSION

So that was the G20 summit, ladies and gentlemen: basically focused on growth, because it’s the major subject, because for all the countries that were here – which are both the most powerful in the world and the most vulnerable when there’s unemployment, when there are inequalities, when there are frustrations – it was very important for us to meet with this in mind.

Not all of us – the states at the G20 table – have the same economic policies, because we’re not necessarily in the same situations and because we don’t have the same political and therefore economic aspirations. At the same time, we had the same interest in agreeing on common goals, and in order to achieve growth there also had to be confidence. Confidence arises from rules, it doesn’t arise spontaneously. It doesn’t arise simply because movements on the markets are more favourable – they are at the moment, with the fall in oil prices, particularly low interest rates and a European currency that is now at a level more compatible with its [Europe’s] real economy.

There should be a determination to regulate the world. That’s why the G20 was created: to ensure rules exist and are complied with. One of the conditions for there to be growth, one of the conditions for the recovery to be as strong as possible, one of the conditions for confidence to return is for political crises to be resolved. That’s true of the fight against terrorism in the Middle East; it’s true in all the regions where there are tensions, and there are. It’s true in Ukraine.

When there’s no doubt about certain situations, when there are no questions, when there’s no anxiety and no fear of war, investors can invest, consumers consume and states talk about things other than crisis, and above all about growth and progress./.

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