Mr Jean-David Levitte, Diplomatic Advisor to the President of the French Republic, and Mr Ban Ki-moon, Secretary-General - Outcome of the G20 Summit - New York - 10 Novembrer2011 - Photo - Permanent Mission of France/André Ory
On 25 October I promised to come back and speak to you again to draw conclusions from the Cannes summit. I’m happy to be back with you, and I thank again the President of the General Assembly and the Secretary-General for their invitation.
I’d also like to pay a very warm tribute to my Mexican colleague, my friend Lourdes, who from 1st December will take over the heavy responsibility for chairing the group of G20 sherpas of the heads of state and government.
Throughout this year – as France pledged – the G20 has made sure to involve the United Nations in its work. It was the case in Cannes as demonstrated by the presence of the Secretary-General at all – let me insist, at “all” - the events of the Cannes summit, including the dinner for the G20 leaders. The G20 has also kept the United Nations membership informed, before and after the main meetings, of its intentions and decisions. This is an achievement and I know Mexico intends to continue along this path.
The G20 summit was held last week in – let’s admit it – very special circumstances. The Greek Prime Minister’s announcement on 31 October of a referendum on the Euro Zone plan upset the agenda. Despite that, it was possible to validate and adopt the work done in the course of the year, which details I exposed to you in detail during my previous visit. It represents a solid basis for pursuing an ambitious agenda under the Mexican presidency.
I won’t enter into an exhaustive presentation of the Cannes conclusions, which you were able to consult in the Final Communiqué and the Declaration of the French Presidency and whose main outcomes the UN Secretary General has just listed. I’d like to draw a few lessons from our presidency year and from last week’s meeting of G20 leaders:
First conclusion, the G20 is more than ever an essential forum for responding to economic and financial crises.
In Cannes two words presided over our discussions: cooperation and regulation.
In Cannes, given the Euro Zone situation, the summit’s main goal was twofold:
— first, a commitment by the G20 members to use all the room for manoeuvre they have to relaunch global growth. An Action Plan for Growth and Jobs was adopted, containing numerous specific commitments over the short and medium term. It sends a message of G20 unity, oriented towards action. Each country will, according to its budgetary, economic and financial situation, do its best to contribute to the recovery of a global job-rich growth.
— second, the G20 countries agreed to boost the IMF’s resources and tools. We decided to give the IMF the capacity to respond to possible future crises and thus prevent systemic contagion, whether the crisis hit advanced or emerging economies. The central issue at the Cannes summit was that of the “firewall”. Several options were identified: either voluntary contributions by countries with surpluses to a special IMF account, or bilateral loans, or even a possible new allocation of SDRs as was decided in London in 2009. The precise practicalities, and the figures attached to the mechanism, will be defined by the G20 finance ministers in time for their next meeting, probably held in February.
Second lesson: the main economies together assert the need for rules, whereby to accompany the globalization of trade and therefore the necessity of ever closer cooperation between them to adopt these rules and guarantee their implementation.
It is particularly true of the regulation of the financial sector. Numerous results were achieved in Cannes:
— First on preventing and managing the collapse of systemic (“too big to fail”) banks: they will have enhanced obligations for supervision; resolution and prudential requirements will be applied. A list of 29 systemic banks was published by the Financial Stability Board. The list of those banks will be updated every year and, in particular, capital surcharges will be applied to them from 2016 onwards;
— Second, decisions have also been made on regulating and supervising the parallel or “shadow” banking system;
— Third progress has also been made on regulating commodity derivatives markets, with the introduction of ex ante position limits. It is a major development that will have a practical impact in terms of food and positive consequences on the poorest countries;
— Fourth, important progress was achieved on the monitoring of commitments. In Cannes, we published for the first time a subject-by-subject dashboard, that will be updated every year, based on enhanced mechanisms for monitoring the implementation of each of the G20’s decisions. For example, on the remuneration of traders, a bilateral complaints system was established in the event of non-compliance with the commitments made.
Another example: the strengthening of financial regulation is accompanied by increased action against non-cooperative jurisdictions, including on tax havens. The G20 drew on the Global Forum’s report that gathers 105 States. International action is not aimed at stigmatizing or criticizing anyone, it simply seeks to accelerate compliance with all the common rules, indispensable to reduce risk factors for financial crises but also to establish fairer economic relations between the nations.
In Cannes, the G20 decided that, in addition to the rules now governing the financial, sector we would progressively reinforce rules in the monetary and economic spheres.
So, important progress has been made on reforming the international monetary system: joint conclusions were adopted on the management of capital flows, on the action plan on the development of local currency bond markets and on the cooperation between the IMF and regional financial arrangements. In Cannes, we also agreed upon the strengthening of IMF surveillance, particularly as regards capital flows. Not only was there progress to regulate globalization, but also to increase the representativeness of the international monetary system. In Cannes, it was decided to review the composition of the IMF SDR basket in 2015, or earlier, as States comply with the existing criteria to enter the basket.
These advances, which are very technical, I admit, are actually major steps towards a multipolar monetary order, which will complement the multipolar political and economic worlds which have gradually established themselves over the past 20 years. Let me also underline that progress in the monetary field was achieved in Cannes without tensions, without what used to be referred to in the past as the “currency war”.
Let me now come back to you on development issues, mentioned by the Secretary-General, and that represented a major topic for the French presidency. I’d like to draw attention to the important results obtained here as well, particularly when it comes to the two priorities we’d been keen to highlight: food security and infrastructure.
I refer you to the Cannes final declaration, which details all the measures we agreed and in particular the 11 exemplary infrastructure projects to realize in Africa. I want to underline here again the change under way in international relations.
France took the initiative of asking Bill Gates to prepare ad present a report on development financing. On the basis of this report and the discussions held in Cannes, the Summit’s conclusions underline that the most developed countries must and will honour the commitments taken before the international community, particularly as regards their Official Development Assistance. But the emerging countries, which presently hold huge currency reserves, said they are prepared to increase their support for the developing countries. As you can see, advanced and emerging economies are united to better share our means in favour of development. Finally we signalled, all together, the need for innovative financing on the basis of the Bill Gates report.
On that point I would add that France fought for the financial transaction tax to be adopted or at least recognized as an essential tool to deal with the huge challenges ahead of us. The Secretary-General has just mentioned that of climate change. The communiqué acknowledges that, for the first time, the G20 leaders not only discussed it, but that some have decided to press ahead. Support for this idea is growing and France will maintain its efforts to establish the tax on financial transactions at European level.
I could go back over other items on the Cannes agenda, such as agriculture, energy and globalization’s social dimension– items on which we also agreed to reinforce our cooperation: cooperation to increase agricultural production at global level, cooperation to strengthen dialogue between producers and consumers, boost oil and gas market transparency, cooperation to make employment and establishment of social protection floors common priorities and finally cooperation to reinforce the international tools for fighting corruption. But I had already touched upon all these topics on October 25 and all that I told you on that day is in the Conclusions.
To conclude and as last lesson drawn from our Presidency, I want to say a word on global governance.
The G20 has decided to remain an informal body, a body listening to every country, involving the main international organizations and in particular the UN Secretary-General.
The heads of state and government talked at length about that issue, on the basis of the report prepared by British Prime Minister David Cameron.
The G20 has clearly decided to remain a process directly conducted by the heads of state and government, an informal one, focusing on the search for consensus centred on the main international economic and financial issues. We’ve simply decided to improve our working methods, in particular by formalizing the Troika. It is now for Mexico to pursue this.
We will, of course, keep encouraging the necessary reforms in the international organizations, so that everywhere, mandates and missions are tailored to twenty-first-century realities, with due regard for the procedures of each of these organizations. We did so this year for the FAO, with the launch of the Rapid Response Forum to address food crises. We have signalled to our trade ministers the need to propose a reform of the WTO with the full agreement of its Director-General. Finally, we have, as I’ve already said, strengthened the Financial Stability Board.
The Cannes summit has enabled us to make headway in addressing the immediate crisis but also long-term issues.
As our G20 presidency is about to end and we pass the baton to Mexico, I would like one last time to thank you for the spirit of dialogue which has enabled us, throughout the year, at various levels, to have exchanges which gave us inspiration and helped us grasp what was expected from our presidency.
Turning to my friend Lourdes, I’d like to tell her how much confidence we have in Mexico to pursue the difficult but enthralling task ahead.