Thank you, Mr. President, and thank you for inviting me to this UN General Assembly meeting. I too would like to take this opportunity to thank Secretary-General Ban Ki-moon for being here today, and I would like to offer a heartfelt tribute to my friend Ahn Ho-Young and the entire Korean team which so masterfully carried out the G20’s work all the way through to the very successful Seoul Summit. Our Korean friends set the bar very high, and it’s going to be very hard for the French presidency to keep up. Luckily, I received a case of ginseng to get myself in the Korean mode and to try and maintain the pace set by our friends in Seoul.
We have had five G20 summits. I would like to remind this General Assembly that it was President Sarkozy who first proposed the idea to the UN General Assembly a week after the collapse of Lehmann Brothers, when the world was wondering what to do. The proposal to convene a summit in order to avoid the catastrophe of the 1930s was accepted. Two months later, we held the first summit in Washington.
As Ho-Young said, I think the G20 has done a good job at these five summits. Without overdoing my praise, I believe the financial system was saved. It remains vulnerable at the global level, but we can say that it was saved, if only just. Unlike in the 1930s, we resisted, together, the temptations of protectionism. Together—and by that I mean all of us, together—we led the world toward global economic recovery. And then we reformed the World Bank, the Monetary Fund and, finally, put an end to the black holes in the global financial system. I am referring to tax havens, to the necessary regulation of rating agencies, to traders’ salaries, to the regulation of hedge funds. All this was done on an urgent basis with the feeling that our backs were against the wall, that we had no choice.
Today the pressure is easing; we have a choice, yet the economic situation remains fragile. Global imbalances persist, and after the remarkable result achieved by the G20 under the Korean presidency, we believe the time has come not just to resolutely pursue the momentum instituted by our Korean friends and to implement all the decisions that were taken, but also to think about the reforms—the structural reforms—that are necessary in the medium term. This is harder, because we don’t have that feeling of pressure, of standing on the edge of a precipice. It is harder because it means dealing with global imbalances with regard to which everyone must do their part. We’re convinced that we will succeed only if all the actors manage to achieve mutual understanding, if we understand that all of us must seek compromises in a spirit of responsibility. We live in an interdependent world; everyone must do their share. It will be hard; we know that.
The most difficult topic is the one that Ho-Young mentioned, i.e. the imbalances, and how to slowly but surely put world growth back on the right track. In order to achieve that, as a result of the Summit in Seoul, we have chosen to implement this monitoring mechanism. We are going to work on this with the Monetary Fund. And then, through dialogue, and through the background information that we will receive and the help of the Monetary Fund, we will try to make progress, to move towards a consensus, to make progress without any disagreements. I said that we believe that the time has come to think about the structural reforms - medium-term reforms - that the world needs. We believe there are three of them.
The first is the reform of the international monetary system. I remember that when President Sarkozy launched this idea the first time everyone told him "but you are crazy, you will never be able to achieve that." I think that today we agree that this is an essential reform; we can’t avoid it so let’s try to make progress.
We received approval in Seoul to move forward with the help of the International Monetary Fund and we now have to ask ourselves 3 questions; at this stage we prefer to ask questions rather than just present our convictions.
The first question we ask ourselves is how can we coordinate our exchange policies, our monetary policies more effectively? We have the framework for strong, sustainable and balanced growth which is the heart of the G20. We now have a monitoring mechanism that we will need to implement; do we need another forum that is specifically devoted to the issue of currency? Until now it was the finance ministers of the G7 who were responsible for this work but the world has become multipolar, including at the monetary level. How can we think about a reform without the participation of the yuan, the participation of China? These are the questions that we will put on the table.
The second question that we will ask ourselves is how to guarantee for all the countries that are in this room greater protection against the volatility of capital flows. This question is particularly valid for emerging countries and certain other countries that experience capital inflows which then suddenly disappear and these countries are then faced with a serious crisis.
In Seoul, we established the first financial safety nets through two facilities. We believe that we must go further and we will try to convince our partners to take action in this direction. And then we should ask ourselves if national control measures are in some cases justifiable. Of course, controls are never a good thing, it shouldn’t turn into protectionism but at the same time a country that sees a sudden, massive influx of capital and then sees its currency disappear must be able to react. How do we respond to this question? Should it be at the global level? Should it be at the regional level? Should it be a combination of the two?
The third question that we ask ourselves regarding the reform of the international monetary system is the even more difficult issue relating to the diversity or diversification of reserve currencies. Until now there has been a currency basket at the Monetary Fund, there were ground rules. Should special drawing rights play an increased role? During the urgent crisis, the decision was taken to issue a great deal of additional special drawing rights. Do we need to go further? This is another question that we are asking ourselves as we look for a way to increase the stability of the international monetary system.
Here are some questions, some possibilities for the initial structural reform.
The second reform that we consider to be of importance relates to excessive commodity price volatility. We all remember the food riots when the price of certain agricultural products exploded in 2007 and 2008 prompting serious crises in Haiti, West Africa and other regions. We cannot accept this yo-yo phenomenon, whether with respect to the price of agricultural products or energy prices, without asking ourselves a few questions. Isn’t there a way to have prices that generate profit but are not subject to erratic fluctuations? With this in mind, Seoul tasked the competent international organizations in the area of agricultural prices - the FAO in particular - with providing its expertise in order to make recommendations to us. And the same thing for energy prices which have fluctuated - oil prices increased from $40 to $140 before falling back to around $80-$85 today. There again can we avoid these price shocks which have a negative impact on the economy and growth? The first thing we can do is perhaps to regulate the commodity derivatives market. Why did we decide to regulate - and succeed in doing so - the derivatives market for financial products? We’ve been told it’s impossible to do the same thing for commodity prices. That’s the first objective.
Regarding agricultural commodities, we believe we should increase market transparency, implement stock policies so that we know where stocks are when prices begin to rise and how to deal with them, and perhaps also develop insurance policies. If you are one of the least developed countries, a major importer of commodities, and suddenly prices explode, can’t we, at the World Bank for example, implement an insurance policy that will help the importing country deal with a crisis that might prevent it from feeding its population? We will hold a meeting of the agricultural ministers of the G20 and all of the international organizations concerned, starting with the FAO, to talk about all this in May in Paris. We will take the same approach with respect to energy prices; we need more transparency in the spot markets, we need to relaunch comprehensive dialogue between the producers and the consumers.
The third topic, and I am happy to be able to discuss this at the UN General Assembly, is the improvement of global governance. We live in a globalized world; we need international organizations that are in good working order. The movement began with the reform carried out by the World Bank, in Pittsburgh and then in Toronto. In Seoul, we achieved the biggest reform of the IMF since its creation. We believe we should go further by firstly asking questions about the functioning of the G20. We have decided, thanks to the Korean presidency to set rules regarding the countries invited; this is notably a Korean idea which I would like to commend, to always have 2 additional African countries. I think this is a wonderful idea which would quite fairly readjust the continent’s representation. Some people say that’s not enough. From now on there will be 3 African countries at each G20 Summit: South Africa, a country representing a major African organization, either the African Union or another organization, chosen through dialogue, and another African country - the country holding the presidency of the G20 will determine, together with Africa, the best choice.
Do we need a permanent G20 secretariat to help ensure continuity? That’s a question we should ask ourselves.
And then the question that strikes a chord today is how can the G20 work more effectively with all of the international organizations, starting with the United Nations, the General Assembly.
And following Ho-Young’s example, and if the president does me the honor of inviting me, I would be happy to come back and talk with you as we make progress.
But we must go beyond the UN General Assembly; the entire UN family must be involved in order to help the G20 make progress. I mentioned agricultural products, the FAO must be involved, but the UNDP must also be involved. We will determine which UN institutions can help us make progress and identify solutions with regard to all of these issues. There’s no limit to our determination to work with the entire UN system.
Some people heard my president say "but we also need to reform the Security Council." Should the G20 deal with that? The G20 is devoted to the economy and to finance. At the same time if we are determined to engage in dialogue with the entire UN system, shouldn’t the G20 express the hope that the General Assembly will be able to break the deadlock under the presidency of President Deiss regarding the key issue of Security Council reform? I am asking the question, I don’t have a response. I know that it’s a sensitive debate and we will see where we are in a few months time. On behalf of France, I would like to express the desire to see the General Assembly make progress on this sensitive and difficult project.
There are of course other topics beyond the 3 medium-term structural reform issues. There are topics that Ho-Young mentioned and I won’t expand on these since I support everything he said and my only hope is that we can extend the progress made in Seoul regarding development issues. I think that it’s a good thing that the G20 is addressing development issues. What would you have said if, during summit after summit, we only focused on the problems of the rich countries and emerging countries, and ignored the least developed countries? I think that it is a very good thing that under Korean presidency the G20 decided to get involved in development issues. But of course we know what the main responsibilities of the United Nations are. And there again we will work hand in hand with the entire UN system.
I would like to say something about one topic within the framework of development: this relates to innovative financing. As the Secretary General underlined, innovative financing will be a priority for us. It’s a priority for you, it’s a priority for the UN, and it must be a priority for the G20.
There is another topic that is important to us: the fight against corruption. Essentially, the crisis provided an opportunity to clean up the financial system. The fight against corruption is now on the G20’s agenda and it’s also on the UN’s agenda - we have the UN Convention on the Fight against Corruption and thus there again we must combine efforts in order to make progress.
The final topic that I would like to mention is the social aspect of development. This is very important to France. We will hold a meeting of the labor and employment ministers of the G20, open to the International Labor Organization, and open to the UN family.
Ho-Young mentioned trade; I won’t come back to that topic. This is a priority for us as well. I will end with one thing, Mr. President, by saying that there is a method behind everything. For us this method consists of wide-ranging discussions, the achievement of a consensus through understanding and above all listening, listening within the G20 and beyond the G20. That’s why we consider our dialogue to be so important. But moreover, President Sarkozy will go for example to the African Union Summit in Addis Ababa at the end of January to engage in dialogue with all of the Heads of State of the African Union, to listen to them, to know what their expectations are, to know what the priorities are so that the G20 can represent these expectations, meet the hopes of the world.
Thank you Mr. President./.