Brussels, 26/08/2010 (Agence Europe) - A new Bretton Woods and the rules on raw materials are the principal priorities of France, which will take over the presidency of the G20 for a year on 12 November.
The first area of work is that of the reform of the international monetary system, explained Nicolas Sarkozy, the French president, at the annual meeting of the ambassadors in Paris. “The prosperity of the post-war period owed much to Bretton Woods, to its rules and its institutions. Since the early 1970s, we have been living in an international monetary non-system”. Sarkozy does not wish to return to a system of fixed exchange rates. He recommends the creation of “instruments to prevent the excess volatility of currencies, the accumulation of imbalances” and seeking “increasingly high levels of exchange reserves by the emerging countries, which have been faced with brutal mass withdrawals of international capital”. This reform could be discussed first of all “at a seminar between the most eminent specialists, in China”, Nicolas Sarkozy suggested. He believes that this reform should be based on three pillars: - reinforcing the crisis management mechanisms (reviewing the international insurance mechanisms and launching a debate on the “international doctrine on movements of capital”; - challenging the domination of the dollar over the international monetary system (“offering international reserve assets which are not issued by just one country would help to reinforce the stability of the system as a whole”, said Sarkozy); - better coordination of the economic and monetary policies of the major economic zones. On this last issue, Nicolas Sarkozy hopes to go further, proposing to “define a new framework for cooperation” on change developments in place of the existing G7, and including China in it.
The second area of work France hopes to concentrate on is the volatility of raw material prices, as evidenced at the moment by the hike in wheat prices. France is proposing to its G20 partners that this dossier be opened “with ambition and pragmatism”. First of all, Sarkozy said, we need to consider the very functioning of the raw materials derivative markets. “Why should we regulate the derivatives market in just the financial domain? Extending the rules to raw materials is possible and desirable. It would allow us to limit speculation”. Then, for agricultural raw materials, several courses of action could be explored: market transparency; storage policies; but also the creation by the international financial institutions of insurance tools to allow the importer countries to protect themselves against price volatility. Lastly, as regards energy prices, France plans to recommend transparency measures and in-depth dialogue between producers and consumers to limit price fluctuations.
The third area put forward by the French Presidency of the G20 is the reform of global governance. Sarkozy suggests creating a G20 secretariat to permanently monitor the implementation of the decisions taken and to prepare the dossiers. The G20 should also, Sarkozy continued, open up its agenda to new subjects: development, rules on good conduct for public aid, innovative financing (such as a tax on financial transactions. “This funding is vital if we are to meet our millennium objectives and our objectives under the Copenhagen agreement on climate change”, said Sarkozy, before concluding. “Cancún will be an important stage, but the critical moment to seal an agreement will more than likely be the summit of November 2011 in South Africa”. (L.C./transl.fl)