Brussels, 24/01/2011 (Agence Europe) - Officially presenting on Monday 24 January the priorities of the French presidency of the G20 for 2011, French President Nicolas Sarkozy said that the French would start work on fundamental issues that cannot wait any longer, in order to give an increasingly impatient public opinion some tangible outcomes. The priorities focus on three areas - reforming the monetary system, regulating commodity markets (see separate article) and global governance.
France wants its international partners to admit that the world has changed and the international organisations need to follow suit and adjust to match the new multilateralism, acknowledging the greater role of emerging powers like China. The system set up in 1945 was based on different balances of power in the world system, balances that have now changed. We are facing a new world and need new ideas, he explained, listing a raft of examples of the growing number of imbalances around the world, be they macroeconomic, financial or climate-related.
On currency questions, France does not want to return to a fixed exchange rate system or to challenge the dollar's leading role (62% of currency reserves are in dollars) or restrict movements of capital. Sarkozy hopes that the views of the G20 countries would converge on matters like the “internationalisation” of the Chinese currency, the yuan. A timetable and mechanism could be defined, for example, for the yuan joining the basket of currencies in the DTS, the IMF's accountancy unit. Upon invitation from France, China will be organising an international seminar on monetary issues in Beijing in late March 2011, and a special working group will be chaired by Germany and Mexico.
France will be calling for the IMF to play a greater role in monitoring macroeconomic imbalances assessed using various indicators and Sarkozy said he hoped to see results next month. He also suggested drawing up codes of conduct for the management of capital flows.
TFT. Sarkozy said that France wants to see a tax on financial transactions (TFT), describing this as a useful, ethical idea, although some people are dead set against it. He said a TFT would muster new resources for development. He was less forthcoming about France's and Europe's desire to set an example by launching initiatives. He swept aside the idea that the TFT would punish normal bank transfers as well as speculative ones. The London G20 summit promised US$100 billion to finance development around the world.
Sarkozy called for the introduction of a universal welfare benefit and urged the G20 nations to ratify the eight international conventions in force in this domain. The first G20 social summit will be held the day before the Cannes G20 summit in November 2011. (M.B./transl fl)