Modest results? This is the verdict largely shared in all the different commentaries on the G20 summit results from Cannes last week. The adjective modest in my opinion reflects a certain reductiveness and tendency to consider opinions that do not correspond to one's own as being negative. The different political forces, commentators and economists all have their own ideas and this is quite normal and positive because the difference of opinions is indispensable. Nonetheless, if each different party regrets or disapproves of the overall result because one or other of the details contained within it does not correspond to their own opinions, the overall assessment is distorted. This is despite the fact that an international meeting has taken place, which has brought together representatives for the world's main powers, wealth and productive forces. The results obtained are thus minimised.
I prefer to engage in a completely different exercise and attempt to underline the aspects that represent progress towards international governance, whilst taking into account the different essential interests in the world. I will also attempt to underline the convergences of views observed and the orientations that are positive for all the different parties.
My apologies for these introductory explanations but my positive résumé can now commence. Different items of news have been covered in EUROPE 10489. Additional details published in yesterday's publication on the “action plan for growth and jobs” for each of the different countries and the rejection of protectionist tendencies should also be taken into account. I draw from the different results that have been brought together and which I consider as having solid foundations, together with the explanations for this positive assessment and the prospects that the G20 has put into place.
1. Taxing financial transactions. For the first time, the possibility of a tax on financial transactions was explicitly mentioned in the final G20 press release. The president of the meeting, Mr Sarkozy, also mentioned G20 country or body members that were also in favour of this measure: the European Commission, Germany, France, Spain, Brazil, Argentina, South Africa and Mr Ban Ki-moon, the UN Secretary General. Obviously, unanimity does not yet exist and the tax revenue does not have the same objective for everybody: aid to poor countries as a single destination or different ones? The European Commission proposal considers that this tax (which has been estimated to be worth €57 billion a year as from 2014) could help increase Community budget coffers.
It should be emphasised that almost all EU countries are in support of this tax (apart from the United Kingdom and Sweden). If the majority of these countries are not mentioned in the G20 press release, it is quite simply because they are not part of the G20, due to their size. Nonetheless, it was on behalf of the EU as a whole that Mr Barroso and Mr Van Rompuy stated that they intended to “develop this idea”.
As for the USA, Washington still harbours doubts about the formula supported by the EU and the others but not on the principle itself of introducing a measure that has a similar effect. Speaking in Cannes, the president of the G20, Mr Sarkozy, indicated in the final press conference that Mr Obama was “the first president of the US that has taken a step towards taxing financial actors”.
Despite some of the still controversial aspects, it is more than encouraging that an idea that has been circulating for years is now mentioned in the final declaration of the G20 summit.
2. Agriculture. For the first time, the G20 included agriculture in its debates and highlighted important principles and orientations because these involve countries that have always disagreed with each other in this area. Price volatility and transparency, together with market regulation were mentioned and the president explained that the objective was to prevent a single actor being able to manipulate prices through disproportionate purchases or sales. This is an extraordinary turning point for those (and that includes me) who consider that speculation in this domain constitutes a crime against humanity: speculating against the starving! The G20 is calling for real powers for market regulators so that they can tackle the abuses being committed in this arena (the way in which the abuse is carried out is widely known). Export restrictions will be banned (with regard to purchases) for emergency aid and humanitarian stocks. The G20 supports the World Food Programme and the initiatives aiming to improve knowledge about the situation and market perspectives.
But in this domain, the primary concern logically involves production. Support for this has already been mentioned. This aspect goes beyond the remit of the G20 for two reasons: (a) the poorest countries are not part of the G20 and certain ignominious behaviour witnessed in conflicts between them, as well as piracy (we only have to think of Somalia), creates barriers to carrying out efficient action; (b) world trade depends on the work undertaken by the WTO in Geneva, where the respective positions of the US and Brazil are still very far from reaching any convergence.
Despite these limitations, the way in which the G20 has become involved in the agricultural arena is very encouraging.
3. Social questions. For the first time the G20 included the social chapter in its final press release in order to affirm a number of principles: (1) globalisation must include a social dimension; (2) economic growth and competition are not incompatible with a high level of social protection. On the contrary, social cover can represent a potential lever for relaunching growth, because it helps prevent a fall in consumption.
Logically, the president of the G20, who is from a country where social welfare guarantees are among the highest, underlined that developing countries in their current situations should be able to expand the basis of social guarantees in their own countries because this factor helps promote economic growth.
4. Climate: excessive caution? The G20 results on the climate issue were testimony to the misgivings and divergences that have so far affected any ambitious or stated figures in this connection. Positive achievements in this field are therefore modest. Determination, however, was stated in an effort to get the forthcoming World Conference (in Durban on 28 November) to make progress in all areas of negotiations. There is a principle of commitment in this area but the timeframes are up to the appropriate ministries, particularly with regard to financial commitments. For the time being, generous promises from the ministries of finance do not appear to be on the cards …
It is therefore understandable that Greenpeace International sharply criticised the absence of any clear indications on the measures that this NGO considers essential, notably: the scrapping of subsidies to fossil fuels (this promise was made two years ago) and a transport carbon tax. Are financial difficulties responsible? According to Greenpeace one solution would be to use the funds better which are currently generously showered on the banks and other destinations (see EUROPE 10489). The climate dossier is in fact so complex and controversial that it was previously unthinkable that the G20 would be able to define detailed orientations, apart from affirmations of principle.
5. Financial orientations. In my opinion, the G20 results in this domain surpassed all expectations. The summit declared that it was prepared to grant substantial supplementary resources to the International Monetary Fund (IMF), so that it had enough resources to enable it to perform its role. The details will be defined by the respective ministers of finance, which is normal because distribution and the modalities in these new contributions have to be fully clarified. It is also normal that developing countries have the right to more control in the way the IMF is managed and in how it makes its decisions if their own financial contributions increase.
It is obvious that no orientation and even less so, any decision, can be taken at the present time. The summit president simply indicated that an IMF with better resources would be able to “respond to the different crises wherever they were or whatever they consisted of, in a co-ordinated and exhaustive fashion”. Nonetheless, all the different participants were thinking of eurozone countries in difficulty because the world is now aware that everyone needs the euro crisis to be overcome since this is in everyone's interest.
The second significant factor was the fact that Italy agreed to IMF monitoring on the way in which it implements its measures. Although Mr Berlusconi indicated that it had been Italy which had made this request and that the IMF had not responded to this comment (which looked like self-interest), the important thing is that monitoring now exists. The first visit of IMF inspectors to Rome will take place this week, in addition to European Commission surveillance that is already taking place.
This is important progress because the Rome programme, which had been considered satisfactory in principle in both Brussels and New York, had not yet been translated into legislative texts. Moreover, putting the Italian budgetary situation on a sure footing is absolutely essential and the European Central Bank (ECB) will not continue to purchase Italian treasury bonds on the same basis of the bond deadlines that are currently expiring. I would like to point out that in Cannes, the president of the Commission, Mr Barroso, acknowledged that the markets had doubts about Italy's ability to apply its programme and explained that “this is an objective fact” and it is up to the Italians to prove that it is not the case. To this effect, monitoring by the European Commission and the IMF of the application of the Rome plan represents a guarantee (Barroso added that the Italian case is radically different from the case in Greece). The G20 therefore managed to obtain its goal on this (even though the Italian situation requires a specific column, which will be forthcoming).
My list of positive points could go on. This is why I consider the results of the most recent G20 summit were not modest but were largely positive, and my analysis today has not exhausted the subject. (FR/transl.fl)