Cannes G20 summit
Paris, November 7, 2011
The Minister for the Economy, Finance and Industry made a statement on the Cannes G20 summit.
On 3 and 4 November in Cannes, President Sarkozy chaired the summit of G20 heads of state and government.
This summit allowed us to consolidate the comprehensive response provided by the Euro Area states at the 26 October summit.
Unanimously welcomed, this comprehensive response will be supported by the G20, which undertook to increase International Monetary Fund (IMF) resources, if this is felt necessary, so that it can play its role as a firewall against systemic risk.
Secondly, the G20 countries decided to use all the room for manoeuvre available to support growth, with each country – depending on its situation – implementing the most effective combination of short- and long-term action.
As part of this greater coordination of economic policies, countries with large foreign trade surpluses pledge to increase domestic demand and speed up the flexibility of their exchange regimes to reduce currency reserve accumulation over the medium term. Moreover, all countries pledge to carry out the structural reforms necessary for growth and for consolidating their public finances over the medium term. This action plan takes full account of the social dimension of globalization by putting the accent on employment and the importance of social safety nets for growth.
Finally, the Cannes summit allowed significant progress to be made on the French presidency’s priorities.
In the field of financial regulation, the G20 decided to increase the regulation of the large “systemic” banks, which will be subject to enhanced obligations as regards supervision and resolution regimes and, from 2016 onwards, capital obligations. The Financial Stability Board published an initial list of 29 large, international systemic banks.
The fight against tax havens was stepped up by means of an assessment of compliance with the commitments made. This assessment led to the publication of a list of the 11 jurisdictions not fulfilling the standards on combating tax evasion.
In terms of financial governance, a decision was finally taken to transform the Financial Stability Board into a real global finance organization.
On the reform of the international monetary system, significant initial steps were taken, with the development of a framework for managing capital flows and a broadening of the IMF’s monitoring of exchange rates, capital flows and the effects of economic policy excesses. A revision of the Special Drawing Rights basket will be carried out in 2015; it could lead to the inclusion of the yuan, given the Chinese authorities’ commitment to progressing towards its convertibility. The IMF will create a new facility, so as to offer its members a short-term liquidity line to tackle systemic shocks.
The G20 also, for the first time, incorporated agricultural issues into its agenda. The transparency of agricultural markets was strengthened by the establishment at the Food and Agriculture Organization of the United Nations (FAO) of a database on production and food stocks.
Commodity derivatives markets will be better regulated, so as to limit market abuses. Finally, in order to prevent famines, emergency humanitarian stocks will be prepositioned in vulnerable regions, and the G20 commits itself to forgoing all restrictions on the export of foodstuffs for the World Food Programme.
The G20 demonstrated its commitment to supporting growth in the developing countries, by removing obstacles to the creation of major infrastructures, particularly in the areas of transport and energy. For the first time, the G20 also had an in-depth discussion on innovative financing for development and decided to recognize initiatives by some of its members to tax the financial sector, including the financial transaction tax./.