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G20/Los Cabos summit/French priorities

Published on June 15, 2012
G20 summit – Letter from M. François Hollande, President of the Republic, to Mr Felipe Calderón Hinojosa

Paris, June 14, 2012

Dear President,

In the last four years, the G20 has made its mark as the premier forum for international economic cooperation. With every summit, its unity and action have helped build confidence and tackle the most urgent issues. Today, as the global economy experiences another period of doubt, expectations run high. We cannot disappoint.

I would like to share my priorities with you in the run-up to the G20 summit, which you will be hosting in Los Cabos on 18 and 19 June 2012.

My number one priority is for the Los Cabos Summit to be the summit for growth and employment. To support business and ensure fiscal consolidation, we need concrete measures and to reduce global economic imbalances. Such is the aim of the Action Plan for Growth and Jobs, which we are to adopt. All the members of the G20 – developed economies and emerging economies – must assume their responsibilities.

Europe knows that it needs to rise to the occasion. Since taking office, I have made more and more contacts to steer the European agenda towards the objective of sustainable, responsible growth. Ten days after the G20, the European Council meeting of 28 and 29 June 2012 will have to take new initiatives to restore confidence in the Euro Area and stimulate growth in the European Union.

The increase in the International Monetary Fund’s resources, decided on in April of this year, is an important outcome of your G20 presidency. It shows that together we can respond to any new crisis. In Los Cabos, it is important for this increase to be defined and confirmed. We should also undertake this year, in keeping with the commitments made in 2010, to implement the reform of the Fund’s governance, as ratified by France but not by the G20 as a whole.

My second priority is for the G20 meeting in Los Cabos to reaffirm its political commitment to take forward the reform of the regulation of the financial sector. Everyone now acknowledges that the financial sector’s excesses are largely responsible for the crisis we are experiencing today. The G20 has already made headway in this area, as it has in combating non-cooperative jurisdictions and countering corruption. Yet we need to ensure that commitments are implemented across the board and we need to go further and faster.

Our aim is to guarantee more stability, with a financial sector truly working for the economy and growth. We have seen some serious events on the financial markets recently. They make the case for stepping up financial supervision and introducing prudential standards in all jurisdictions. The Financial Stability Board should be the guardian of these rules, a role it would fulfil all the more effectively if its governance were reformed.

The focus on transparency and market operations also applies to the energy and commodity markets. The impetus given by the G20 in this area should be taken forward.

My third priority for Los Cabos concerns the social dimension of globalization. This subject is a core focus for the G20. Allow me to recall the four areas of action on which we agreed last year: job creation, especially quality jobs and jobs for young people; social protection; respect for the principles and fundamental rights at work, recognized by major international agreements; and the vital consistency to be found between economic policies and social policies.

This priority is there to serve the people and growth. I commend the Mexican Presidency for holding a new meeting of labour and employment ministers. I do believe that this part of the G20 should become a permanent feature. Similarly, the outcomes of the G20’s work on employment suggest that the task force set up on this subject should be taken forward. The G20’s credibility is also to be found in its regular consultations with trade unions, employers and economic stakeholders. The joint Labour 20 (L20) and Business 20 (B20) meeting in Los Cabos is an excellent example of this.

In Los Cabos, we will also discuss the vital subject of development. You have my full support for the priorities you have defined on infrastructures, food security and green growth. These are all drivers for global growth and vehicles for international solidarity, by which France has always set great store.

I would also like us to raise the matter of development financing and especially innovative financing, in connection with a menu of options including the proposed financial transaction tax. I am one of those who deeply believe in the need to introduce such a tax without further delay to meet the challenges triggered by globalization. The Cannes summit last year found a number of G20 members subscribing to this idea. It is time to take action to make this project a reality.

Lastly, as the G20 is a gathering of the leading developing and emerging countries, I feel we should discuss the development of shared, reciprocal rules in an ever-more interdependent world. This discussion among partners may well sometimes be difficult, but it is vital if we wish to develop international trade to serve growth, create fairer competitive conditions for our businesses, and build a fairer world for our citizens.

(complimentary close with handwritten addition)./.

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