Strasbourg, 24/11/2010 (Agence Europe) - The Council and Commission worked hard in the European Parliament (EP) on 24 November to make the most of the slim pickings from the G20 meeting in Seoul on 10-12 November (see also EUROPE 10254 and 10255).
The EU put great store on cohesion and arrived well prepared in Seoul, said Olivier Chastel, speaking on behalf of the Belgian Presidency, but the results were “not as great as might have been hoped”. The real challenge will be implementation and Chastel said he was sure that the EP and national parliaments would be drivers in ensuring that the good intentions were implemented from one summit to the next. On the positive side, Chastel pointed to: - peer review, a process to which Europeans are used and which they find useful; - the pledge to tackle protectionism; - the reform of the IMF, giving the emerging economies an increased role; - the Basel III Accord (the rules for capital requirements for banks are moving in the right direction, it has to be ensured they are applied simultaneously by all); - condemnation of competitive devaluations. France, Chastel pointed out, will hold the Presidency of the G20 from January 2011 and will be in charge at the Cannes summit in November 2011. He sees here an opportunity for the EU to affirm its position, by demonstrating that globalisation is not just economic but also eminently political.
Even though there were no major decisions on financial regulation, the very fact that countries as different as the members of the G20 should discuss this issue and consider options is important, said European Commission President José Manuel Barroso. The G20 did sketch an outline and a timetable for reducing excessive current account imbalances, thanks to the efforts of the EU and others. The forthcoming French presidency in 2011 will carry out the first analysis of these imbalances, on the basis of indicators that will be determined in the first half of the year. The need to link exchange rates more closely to market trends and to economic fundamentals was acknowledged, and the legitimacy of the IMF enhanced through the greater involvement of the emerging economies, which, Barroso said, must show that they are prepared to shoulder greater responsibility in the area of governance. After Seoul, eyes are turning to Cannes, Barroso said: “One of our member states will be in the pilot's seat”, thereby allowing the EU to push hard for a top priority, which is the reform of the international monetary system, and its corollary, reduction in exchange rate volatility (and also the prices of raw materials, Barroso stated, announcing that the Commission would bring forward a proposal).
It is to be wished that the high hopes of the incoming French presidency will be realised: Jean-Paul Gauzès (EPP, France) is optimistic on what will happen after Seoul, despite the somewhat modest results of the last G20. “But where will the spark come from?” asked Udo Bullmann (S&D, Germany), who was unhappy that no decision was taken on taxing financial transactions. The EU will only measure up in the G20 if it adopts a proactive stance on the reform of the monetary system and on financial regulation, said Marielle De Sarnez (ALDE, France). Speaking for the GUE/NGL, her fellow countryman Partick Le Hyaric would have liked the G20 to have had more to say on environmental standards, tackling unemployment, getting rid of tax havens and the “scandal” of rating agencies. Charles Goerens (EPP, Luxembourg) was concerned that, if the G20 did not put an end to the monetary disorder, WTO negotiations might suffer.
Reforming the way the financial system works is a priority, said Andris Piebalgs on behalf of the European Commission. The financial sector will have to contribute fairly to public finances and, if taxes are put in place, it will have to be ensured that this “patchwork” of differing taxes does not prove an obstacle to the operation of the markets. Globalisation of this tax is, in his view, the best way of resolving this problem.
Broaching in particular the issue of a bank levy, Chastel said there was growing consensus on the basis for and the spirit of this levy, though not on the aim or the use to be made of the revenue generated. With member states setting up differing national systems, a minimum level of coordination will have to be sought: the Ecofin Council will make proposals to the European Council in December. The Council's high level group on tax issues will shortly consider the options for a tax on financial transactions. (L.G./transl.rt)