United Nations General Assembly/informal meeting on the Cannes G20 summit
I am honoured to join you here once again in New York. I would like to begin by thanking the President of the General Assembly for his invitation. I also applaud the presence of the UN Secretary-General and thank him for his important contribution to the success of the Cannes summit.
I am delighted that this meeting between the serving presidency of the G20 and the international community is now becoming a regular fixture, and I’d like to hail the efforts made last year by Korea to keep the entire UN informed and involved in the G20’s work.
France embarked on the path set out for her with great determination, and I am happy to come back to you here today. Indeed, France considers the G20’s openness to the entire international community to be crucially important. The G20 cannot and must not be an exclusive club. Even though its member countries represent 85% of global GDP, its openness to others is key to its legitimacy.
As you know, President Sarkozy has devoted a great deal of time to consultations since the beginning of the French presidency. He travelled to the African Union summit in Addis Ababa last January. He has consulted a great deal, both inside and outside the G20, with heads of state and government and leaders of international organizations as well as the representatives of unions, companies and civil society.
We wanted our G20 presidency year to be useful, with results and advances throughout the year, rather than focusing all the challenges on a single event: the annual summit. In a minute, I will get back to that effort. But first I want to thank the international organizations, beginning with the UN and its specialized institutions, that lent their very effective assistance to the agenda of our presidency.
But of course, given the global economic situation, the Cannes summit will have to concentrate primarily on the response to the crisis, which affects not only the Euro Area, not only the United States, but also the emerging economies and consequently all the developing countries.
The G20 demonstrated in November 2008 in Washington, and again in April 2009 in London, that it could confront the crisis effectively. The message at that time was clear: it was necessary to “repair” the financial system, eschew protectionism in order to avoid a repetition of the mistakes made in the 1930s, and coordinate recovery efforts. I would add, of course, the reform of the international financial institutions, which helped restore a balance that has become crucial to the emerging countries.
In 2010, we might have believed that the G20 would in the future have to reinvent itself to manage the post-crisis period, but unfortunately recent economic developments in both developed and now emerging countries bring us back to crisis management. It will therefore be the absolute priority of the Cannes summit.
We hope that in Cannes, the G20 will be able to adopt a real action plan for growth and jobs. The summit will be judged first and foremost on this. To that end, it will need to draw upon the concrete economic policy measures adopted by the major powers. I am thinking of course of the United States, China and the Euro Area states, but also Japan, the United Kingdom and Brazil. I am not going to go into detail here about what we expect everyone to do; but it’s important to realize that from now on the economic policies of some have major repercussions on the economic growth of the others. Our economies have become interdependent. That’s the reality of the 21st century to which the G20 must respond.
Nor do I need to emphasize here the difficulty of the task. While the message from London was unequivocally one of recovery, and that of Toronto was one of budgetary consolidation, the message from Cannes will have to be more diverse; some states need to focus on measures to boost their economy, others on consolidating their public finances and still others on rebalancing their economic models to promote domestic consumption.
EURO AREA CRISIS
I know that many in this room believe that it is first up to the countries of the Euro Area to resolve their problems, before asking others to make an effort. I have two messages for you today.
The first is that the Euro Area is doing its job. The European Council and the Euro Area summit on Saturday and Sunday enabled us make significant progress on all the topics under discussion: dealing with the Greek debt in the long term; the establishment of a European Financial Stability Facility with the ability to act as a strong lever, to reassure markets; the recapitalization of European banks, at the necessary level; and finally, strengthened economic governance of the Euro Area. Tomorrow, Wednesday, we will be holding another summit bringing together the 27 countries of the European Union, and then the 17 countries of the Euro Area to adopt detailed measures. The EU will thus make a major contribution to the stabilization and growth of the global economy.
My second message is that it is pointless to try and pinpoint those who are responsible for the crisis. We must focus on the solutions to be provided. After the failure of Lehman Brothers, we did not sit back and wait for the United States to deal with its banking system. We sought to immediately establish stronger cooperation between the countries most heavily impacted by the financial crisis, because that was the only way to remain equal to the challenges. The same holds true today: no one is immune from the economic crisis, and speculating on the failure of others is not a good strategy, because the interdependence of our economies will ensure a swift transmission of imbalances. That is why France is calling on all G20 countries to adopt measures adapted to the situation and on all countries that don’t belong to the G20 to support the collective efforts that will be undertaken to restore confidence.
INTERNATIONAL MONETARY SYSTEM
Nevertheless, while the Cannes summit will be dominated by the issue of growth and restoring confidence, it will not be limited to the action plan we want to adopt there.
We want to make progress on new items that France placed on the G20’s agenda in late 2010, such as the reform of the international monetary system and the fight against excessive price volatility. Not only are they useful in better regulating globalization, but they now complement the action plan for growth.
Is there anyone who cannot see that it is essential to move forward towards a new international monetary order, reflecting the new economic realities and avoiding the imbalances in currency markets that almost degenerated into a currency war just a year ago? Is there anyone who does not understand that confusion on commodities markets – which has led to excessive agricultural or energy price fluctuations – curbs growth and, even more seriously, is directly responsible for humanitarian disasters?
Allow me to go into a bit more detail with respect to the international monetary system, a key element of the framework for lasting, strong, balanced growth:
The G20 has agreed on nine specific areas of reform, since the successful seminar in Nanjing on 31 March, co-hosted by China and France. I draw your attention to the four main ones:
The composition of IMF Special Drawing Rights. The G20 is working in particular on criteria for including new currencies in the basket of Special Drawing Rights (SDRs).
A frame of reference for managing capital flows. We must have common references to respond to sudden inflows or outflows of capital and avoid protectionist-type reactions, which would have a destabilizing effect.
Strengthening our response to systemic shocks through the establishment of new IMF lines of credit, in the event of a regional crisis. We also hope that the IMF will coordinate its instruments as best it can with the mutual support funds created by Europe, with the European facility, and Asia, with the Chiang Mai Agreement.
And finally, the G20 is working on strengthening bilateral and multilateral oversight by the IMF, notably with respect to the effects of a country’s – or area’s – economic and financial contagion vis-à-vis the rest of the world.
G20 SOCIAL AGENDA
Among the structural responses to the crisis, I’d like to emphasize how important it is for the economic agenda to include an ambitious social agenda. The Secretary-General was right to point that out.
At President Sarkozy’s behest, we succeeded in anchoring the social dimension of globalization in the G20’s working agenda. Not so that there would be one more thing to deal with, but to emphasize that the response to the crisis will be effective only if it includes a renewed, shared concern for jobs, social protection and social rights.
In late September, the employment ministers sealed an agreement that will allow the G20 to move forward in this key area in the coming years.
We secured the support of all members of the G20 for the “Social Protection Floor” concept and the UN initiative drawn up along these lines. The conclusions of the International Labour Conference in Geneva in June 2011 and the recommendations of the Advisory Group chaired by Michelle Bachelet were fully taken into account. The Social Protection Floor is of course defined at the national level and has to take into account the specific characteristics of each country, but its usefulness was emphasized by all.
The international organizations have a key role to play in implementing the G20 agenda, as I’ve already said. This is particularly true in the social realm: the ILO gave its agreement to the G20 to establish a coordination and consultation mechanism and provide platforms for information sharing on best practices with respect to social protection, which must be operational by the G20 summit in Mexico in June 2012. And I would like to thank Juan Somavia, the ILO Director-General, for his contribution and his presence.
President Sarkozy would also like to see the creation of cross-observer positions between the WTO and the ILO in order to further strengthen the coherence of the work of these two organizations.
France would also like the ILO’s Eight Core Conventions to be ratified and observed in all areas, and this to be reported. I know how intense the debates on this issue can be and how difficult it will be to make progress, but France is determined to continue this battle.
Lastly, and above all, the G20 labour ministers’ meeting made employment the top priority of its work. This is a concern that we all share. That’s why it has been decided, together with the Mexican presidency, that a new employment ministers’ meeting would take place in 2012 and that a G20 task force would be devoted to youth employment issues and would bring together the international organizations and the employers and unions. For the first time this year, the G20 presidency facilitated the organization of a “Labour 20” in parallel to the “Business 20.” France hopes that Mexico and the presidencies that follow will repeat this every year.
Allow me now to come to the Cannes summit issues, which are not new under the French presidency, but on which we have worked very hard to make tangible progress.
With respect to financial regulation, the G20 strategy has been based on a simple principle since the Washington summit: all players, all markets and all products must be subject to rules and appropriate oversight. The regulation of globalization also requires –and I’d say above all – rules applicable to the financial sector.
Under the French presidency, the G20 has worked on implementing the commitments made during past summits, in particular that of Pittsburgh, and on new objectives.
The G20 has already adopted enhanced measures for the major systemic banks. We are now working on extending regulation to non-banking entities and activities, such as supervising the parallel banking system – still known as the shadow banking system – protecting the users of financial services and regulating commodity derivatives.
We have also made further progress in dealing with non-cooperative countries and territories, particularly tax havens, and this will be a key topic in Cannes. We are working on a thorough evaluation of the progress made by around 60 countries in terms of compliance with the regulations on the exchange of information, the fight against money laundering and the financing of terrorism.
In Cannes, we hope that that the G20 will sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Almost all of the G20 countries have pledged to sign it but a few partners are yet to be convinced.
Regarding the development agenda, we are implementing the Seoul Mandate. France is driven by one conviction: there will be no sustainable growth for the world economy without shared development. The Least Developed Countries do not pose a problem for world growth; they are part of the solution in terms of strengthening and ensuring it over the long term.
Under our presidency and in close association with South Korea and South Africa, who co-chaired the working group with France throughout this year, as the Secretary-General emphasized, we have made good progress on the nine pillars that constitute the Seoul Action Plan.
Furthermore, for the first time, the G20 held a ministerial meeting on development on 23 September in Washington. Our presidency organized a mobilization conference in support of development on 21 October in Paris which will allow civil society to combine its efforts with those of the governments.
With the agreement of all our G20 partners we have, above all, focused on three particularly crucial themes this year: food security, infrastructure, and financing for development with a strong focus on innovative financing.
With respect to food security, we have already achieved some results, even though the international community’s priority has of course been focused on the catastrophic humanitarian situation in the Horn of Africa.
In June, the G20 agriculture ministers adopted an action plan and I would like to highlight two measures that have already been taken under this action plan.
firstly, an Agricultural Market Information System (AMIS) hosted by the FAO which will enhance the transparency of the markets and make it easier to stabilize them;
secondly, a Rapid Reaction Forum, also at the FAO, which brings together the countries that play a key role in the global agricultural markets and which aims to improve international emergency response coordination. The idea is that producer countries should immediately alert this forum to any supply problem that could have an impact on consumer countries, while the major consumer countries would be more able to make their needs known.
AGRICULTURAL PRICE VOLATILITY
France is also deeply committed to securing G20 support at the summit for initiatives aimed at protecting the most vulnerable countries from the consequences of the excessive volatility of agricultural commodity prices. I am thinking in particular of the pilot project under the auspices of the Economic Community of West African States (ECOWAS): prepositioned emergency humanitarian food reserves.
The success of this project will then allow us to expand this initiative to other regions.
The French presidency also wants to encourage the G20 countries to commit to not imposing restrictions on the exports needed by the World Food Programme for humanitarian emergencies.
Lastly, as you know, France believes that the main policy needed to improve global food security over the long term involves increasing investment in agriculture. We will have to increase global production by 70% by 2050 in order to feed the world’s population. We will need to encourage production in all regions of the world but, of course, we must make Africa our priority.
The second priority on our development agenda: infrastructure. The lack of infrastructures is one of the main obstacles to development in many parts of the world, particularly in Africa. The G20 tasked the High-Level Panel for Infrastructure Investment, to which we appointed Tidjane Thiam as Chairman, to prepare concrete, innovative recommendations to encourage and strengthen infrastructure investment in the developing countries.
We have identified key infrastructure projects for Cannes, on the regional level as much as possible, which will have a maximum impact on economic development. We will strive to ensure that the G20’s efforts with regard to infrastructure remain focused on low-income countries.
With respect to development financing, President Sarkozy asked Bill Gates to present the heads of state and government in Cannes with proposals to renew commitments and launch innovative projects for new means of financing.
We hoped Bill Gates’s report would cite shared objectives relating to ODA, to which France is strongly committed and for which she has maintained her budget, despite the current situation of the public finances (0.5% of France’s GDP in 2010). But the report will also include a “menu of options” dealing with innovative financing mechanisms. We propose that each G20 country draw from this menu, implementing at least one of the options.
France, like Germany, believes that the financial transaction tax is the most effective mechanism. This tax is technically feasible. The European Commission has presented a specific, detailed project. With the support of civil society and international public opinion, which is asking governments to move forward on this issue, we hope to make the argument not only for the feasibility of such a tax, but also for its necessity in order to meet the major development challenges. Several non-EU countries have expressed interest, particularly many African partners such as Mali, Benin, Burkina Faso, Congo, Guinea, Mauritania, Senegal and Togo, and I’d like to urge your countries to play an active role in support of this idea.
Ambassadors, ladies and gentlemen,
Trade makes an absolutely essential contribution to world growth. So I wouldn’t like to conclude this presentation without discussing commercial issues.
The eighth ministerial conference of the WTO will take place in Geneva from 15 to 17 December. We all know that continuing negotiations in the framework of the Doha mandate is very difficult. That is why the French presidency wants the G20 to begin thinking about ways to strengthen the WTO. Our aim is to demonstrate the commitment of all our countries to commercial multilateralism. The WTO is the best bulwark against the law of the jungle, and its ability to resolve disputes must not just be preserved, but strengthened.
I wouldn’t like to say more at a time when experts meeting each day in Geneva are exchanging coded messages that only they can decipher, but France wants a message of confidence in the WTO and of support for the fight against protectionism to be adopted in Cannes.
Of course, we would also like measures benefiting the Least Developed Countries to be adopted as swiftly as possible, because they are central, after all, to the mandate of the trade talks currently under way.
Ladies and gentlemen, dear friends,
As you can see, the agenda of the Cannes summit is a heavy one, and we are facing a crisis of considerable breadth which calls for concrete decisions, strong decisions, and a very clear message about growth.
We have made considerable progress this year on long-term challenges, and we are confident that Mexico will successfully continue the job in 2012.
Today, we are exactly eight days away from the Cannes summit, which begins on 3 November. There is still work to be done. The synergy between the G20, the UN and the entire international community is essential to the success of the summit. Now, more than ever, we need you all. I’ll always be ready to listen to you.