The art of telling everyone they are right. The G20 declaration in Toronto really is a stroke of inspiration: it includes the positions of all participants and each of them focuses on the wording they prefer and congratulates themselves on the position they put forward. This situation is echoed in the different commentaries that have been made, with each of them choosing either to congratulate themselves on being right from the beginning or to criticise the failings of the result. An example? Just before the summit, there were many questions raised with regard to divergences between the US and Germany, with the former making economic recovery the priority and the latter a balanced budget. Both themes are included in the final G20 declaration and a summary of them is as follows. The US position: There is a risk that subsequent spending cuts damage growth; to re-establish balance in global demand, economies that have significant trade assets are urged to promote domestic demand. The German thesis: Recent events have proved the importance of sustainable public financing and countries with serious budgetary problems should speed up their budget consolidation.
There is no single strategy. Other ecumenical examples from the G20 declaration could be quoted. Everyone is partly right. Economic recovery depends on investment, an expansion in demand and production. It is, however, also evident that cleaning up public finances is a prerequisite to future growth because countries that have too high debt cannot finance themselves in sustainable conditions and, in the absence of finance, how would they be able to develop economic activity? The G20 formula subsequently argues that “a reduction in deficits helps growth”. What a superb discovery, why didn't we think of that? The truth is that there is no uniform strategy because the situations are different and the Toronto “declaration” reflects this situation. It touches on a lot of different themes and puts forward intentions and a timetable, but does not make any choices or decisions.
Although the policies advocated are not all the same, neither are the instruments for implementation. Each state will follow its own path with regard to the taxation of financial activities (the Tobin tax or other formulas) and a tax on the major banks is only mentioned as part of other possible instruments. Other obvious factors are highlighted, such as the necessity of preventing any taxation damaging investment flows to the economy, whilst reducing financial risk and obviously taking into account national specificities. The application of new rules on banks' own funds was postponed and on the issue of the rating agencies, the declaration only highlights some of the general principles, such as increasing the transparency and quality of their ratings and avoiding conflicts of interest. Thanks for the reminder.
Increasing the exchange rate of the Chinese currency was not mentioned at all. China had underlined that if its currency is to increase in value, it will be because of internal reasons and developments and certainly not because of demands being made by third countries. China is not negotiating its monetary policy. We already know the results of the G20's thunderous objectives, such as the 50% reduction in budgetary deficits by 2013 - by that time, certain countries will have respected the target and others won't have done so at all.
What's the point of the G20? What I've written so far obviously does not mean that the G20 is a waste of time. On the contrary, developing countries are now part of global economic governance and this is in itself a huge step forward. Not very long ago at all, it seemed like a distant dream. The affirmation of common principles and orientations is also a positive development in itself. Toronto, however, confirmed that the situations are different and that a uniform strategy is impossible. Each group of countries must now take action, whilst taking into account the principles and objectives that have been acknowledged by all.
Time for the EU. This is where the fundamental question facing Europe is located: how can it actually put its response into practice? The result of the G20 has sometimes been described as a success and sometimes as a total failure. Let's take two diametrically opposed positions. The joint Barroso-Van Rompuy declaration outlines a broad convergence at the G20 summit towards European positions in favour of stabilisation and growth. On the other hand, the Greens Group at the European Parliament denounced the failure of the G20, which postponed all decisions on financial market regulation, failed to keep the tax on financial transactions and calls on the EU to take action. With regard to the member states, Germany explicitly rejects the line that good budgetary housekeeping would damage growth; budgetary deficits are, on the contrary, the main cause of the crises.
Europe must put its response to the crisis into practice, whilst taking into account global orientations. We are aware to what extent this work is still ongoing, with the active participation of all the different institutions.
(F.R./transl.fl)