G20 Summit in London
London, April 1 2009
THE PRESIDENT – I should like in my turn to say how pleased I am with this meeting with Angela Merkel, which follows the countless other ones between our teams, and our own telephone conversations, again last night.
Germany and France will speak with one voice – Mr Steinbrück and Madame Lagarde are here too – we will be speaking with a single voice. Our objectives are the same both on the principles and the way to proceed. Our goal is simple – the Chancellor put it very well – we demand results. In Washington we laid down principles, in London, we want something concrete, results.
We are in a very serious crisis which is causing a lot of suffering and is not, in any way, of the making of the people who are suffering. It’s become an economic crisis, but was spawned by the financial crisis. This is why we, Germany and France, want, in the summit’s results, the principle of new regulation to be a major objective. We well understand the need to put fuel [into the engine] and we’ve done so. Germany and France have played their full part in the stimulus, that goes without saying. But we are saying that without new regulation there won’t be confidence and without confidence there will be no recovery. This is a major non-negotiable objective.
With the principle laid down, we have agreed on the same red lines.
RED LINES/TAX HAVENS/ SECURITIZATION/ HEDGE FUNDS/ CREDIT RATING AGENCIES/ TRADERS’ REMUNERATION
Tax havens. This is a historic opportunity to make more ethical a system which has become unethical. It’s now that we have to face up to our responsibilities and the 20 Heads of Government and Heads of State meeting together will have to ask everyone: do they want to put an end to tax havens or do they want them to continue? There aren’t three positions; there are two. A tax haven is a financial centre which refuses to collaborate and give information on the origin of funds. In 2009 can any head of State or Government afford to tell the whole world that it’s normal to have tax havens? We, Germany and France think it’s impossible. It’s very clear: there has to be a list. And the place where’s room for negotiation is on whether the list is published immediately or in a few days’ time. There’s no need to mount big summits to have the list. Everyone is already well aware of that.
Second thing, securitization. I wholly concur with what the Chancellor said. We aren’t against the principle of securitization, without going into the details, – and the Finance Ministers will correct me if need be – but we want traceability. After that there can be discussion. In fact we, Germany and France, are ourselves discussing it. We will very probably take the same position, but we want traceability. The principle that a bank which securitizes assets keeps part of these assets on its balance sheet is simple; there’s nothing technical about it, it’s perfectly clear.
Hedge funds. I’m not going to repeat what the Chancellor has said better than I can, we want hedge funds to be registered and supervised. We can totally accept discussion on the size of hedge fund to be registered. We have to register and supervise. We can discuss this. But the principle: no financial institution unsupervised.
Rating agencies, of course, when we see the scandal caused by the lack of transparency of some rating agencies. Triple A ratings on a Friday becoming triple B on the Monday. Things have to change here too.
Finally, last point: traders’ remuneration. Everyone has to understand that this is a global problem. Suppose Germany and France were to decide that from now on remuneration which prompted reckless risk-taking had to stop, if this weren’t a global decision, it would mean us penalizing our countries. So [capping] traders’ remuneration, making it more ethical has to be a global decision.
All these are red lines. We are wholly prepared to talk with a very open mind about everything else if these problems are clearly resolved.
Final point: I think we have to pay tribute to Gordon Brown – and Mrs Merkel and I do – for all the efforts he is making to bring everyone together. I’m sure we will succeed in finding agreements, but there are other difficulties which it isn’t the moment to talk about now. But this is what we want to obtain because we owe it to the peoples watching us.
RED LINES/COMMUNIQUE NEGOTIATIONS/COMPROMISES
Q. – I’d like some details on the negotiations because you tell us: "we’ve got our red lines", but I get the impression that a lot of them are already being respected. On the traders, can you confirm that there’s been an agreement between your Sherpas on traders’ pay being based on long-term performance and having to have board approval? Can you confirm there’s an agreement to sell off a proportion of IMF gold stocks to finance the poorest countries? Can you confirm that the argument isn’t about publishing the list provided time is allowed for a new "screening" in three months’ time to enable some which might be on the list to get off it? And a final question, particularly to Mrs Merkel, I’ve gathered that Germany didn’t agree with France on accounting standards and the change in IASB governance, can you confirm this?
THE PRESIDENT – I categorically deny the slightest difference of view on accounting standards (…). I’m dumbfounded.
Secondly, – and you must all understand this – since this morning I’ve seen four or five successive texts. Perhaps one of you has got hold of a copy of one of the texts. It would be pretty crazy to see the text adopted before the Heads of State and Government meet. If that were the case, why would we meet? The time for useless summits – perhaps you’ve seen a lot of them – has passed. You know what has brought us to the situation we are in? Experts having control over eminently political matters, particularly accounting standards. People trusted experts, who got it wrong.
When it comes to this summit, as the Chancellor said, a lot of progress has, happily, been made; but we’re not there yet. Moreover, had we been, we could have left this evening. There’s also the layout of the communiqués. We may find ourselves with a short sentence we want [in the communiqué] put in an appendix, there’s no question of that happening.
There are statements of principle, there are major objectives, and I can tell you that Mrs Merkel and I were still discussing these major objectives, what the summit’s objectives are. I wholly understand that some people want to talk about injecting stimulus, so do we. We haven’t merely talked about it, we’re doing it. But regulation isn’t a four-letter word, it’s a major objective.
Q. – Chancellor Merkel, President Sarkozy, you have just talked about absolute objectives. In return, Mrs Merkel would you be ready to compromise on new stimulus measures? And you, President Sarkozy, as a compromise, would you be ready to stay until the end of the summit?
THE PRESIDENT – I’d like to remind you that we are in a multipolar world. We don’t consider that when Germany, France and Europe speak, people do them a favour by listening to them. Let me add that, as Angela said, Europe instigated the idea of the G20. We want the G20 to be a success.
On development and on selling off IMF gold stocks, we’re wholly ready of course. The poor countries which were suffering before the crisis mustn’t go completely under during it, so we have to help them.
If the crisis worsens, do we have to do more? But it’s what we’ve being doing all along. Simply, we’re not fingering anyone as being responsible for the crisis, but we’re saying that it’s a historic opportunity to build a new world. It’s Angela Merkel who used the word "historic", and we don’t want this opportunity to build a new world pass us by. We are in the twenty-first century; the time has come to lay the foundations of the regulations of the twenty-first century. It’s got nothing to do with whims or egos, but with getting results.
We’re expected to get results; will we come up to scratch or won’t we? Of course, compromises have to be made; they always have to be, especially when there are 20 of you. And in Europe we’re very used to compromises, that’s how we built the European Union. But compromises have to come from every part of the world, especially as the crisis did not spontaneously erupt in Europe, did it?
Q. – Chancellor Merkel, President Sarkozy, whom exactly are you targeting when you said that someone isn’t delivering? Are we wrong to think that over the past few days, the American President’s resistance to regulation has increased.
THE PRESIDENT – Barack Obama’s election aroused enormous hopes in the world and in Europe. And you know the decision the French Government has taken to rejoin NATO’s integrated command; it signalled, first of all, a commitment to the Franco-German axis, to Europe and the transatlantic link. Mr Obama was elected on the idea of change, "we can". And the article he published in Germany, France and all over the whole world is excellent. Personally, I’ve got confidence in Mr Obama; but in the United States as in Europe, the administration needs to follow what the leader says. In his article, Mr Obama is very clear about tax havens, about what has to be done with them. I’m sure he’s going to help us and I’m sure he understands.
We’ve got confidence, but it’s today and tomorrow – as Angela said, the day after tomorrow is too late – that we have to take the decisions. It’s no longer a matter of us all, us first of all, making speeches, we have to face up to our responsibilities, it’s what we’re trying to do.
Q. – President Sarkozy, you’ve said several times that you wouldn’t accept a watered- down compromise and that, if that were the case, you’d even prefer to walk out. Are you maintaining this threat and what points won’t you compromise on?
THE PRESIDENT – I’ve just answered that. Listen, first of all, it’s awkward for me to leave when I’ve just arrived. Secondly, Angela Merkel and I are pursuing exactly the same policy, but we don’t want victory for ourselves; we think our positions are the commonsense positions, and we’re seeing things moving forward. Simply, we both wanted to point out that this was a historic watershed and that you can’t equivocate in the face of a historic watershed. And as for the points you talk about, it’s as Mrs Merkel said, I’ve merely gone along with what she said, we share the same convictions. Tomorrow you’ll be able to judge the result of what isn’t a battle, but a frank discussion./.