St Petersburg, 05/09/2013 (Agence Europe) - At the opening of the G20 summit of the world's twenty leading economies in St Petersburg, Russia, on Thursday 5 September, the European Union brought a message of confidence that its budget surveillance work, structural reforms and financial regulations were starting to pay off.
“The eurozone is in a much better shape than a year ago in Los Cabos,” said the president of the European Council, Herman Van Rompuy, on his arrival at the luxurious Constantine Palace founded by Peter the Great in the eighteenth century. “The EU delivered on its commitments made last year,” said the president of the European Commission, José Manuel Barroso. Both of them referred to concerns at the previous G20 summit in Mexico in 2012 about the health of the European continent in the wake of the turbulence cause by the eurozone sovereign debt crisis.
Van Rompuy listed decisions taken in Europe and work currently in progress, noting: “Our decisions saved us from the worst, but we will need to do more to ensure the better. The existential threat to the eurozone has been over for almost a year now.” He mentioned the launch of work on Banking Union, reducing financial segmentation, structural reforms to make economies more competitive and gradual consolidation of public finances. As a result, he said, “Almost all twenty-eight EU member states will have positive growth in 2014.”
“The European Union comes to this summit with a message of confidence. We in Europe are seeing a turning point. We should avoid any kind of complacency, namely because of the high level of unemployment, but indeed there are positive signs of recovery,” explained Barroso. The most recent figures from Eurostat for the second quarter of 2013 show that growth in the eurozone was 0.3% of GDP and of the five countries in the G20 (Germany, France, Italy, the United Kingdom and Spain), only Spain and Italy were still in recession (to the tune of -0.1% and -0.2% respectively. “It is critically important in Europe - and also in other parts of the world - that we make all the efforts to make this recovery sustainable over time,” said Barroso.
However, Barroso didn't want to give any advice to emerging economies currently facing a run on their currencies due to a slowdown in their economies, the prospect of higher interest rates in developed countries and the insecurity generated by the situation in Syria (see related article), which has led to a collapse in the value of the currencies of India, Brazil and Turkey. Barroso said that although growth is below- potential in some emerging economies, he wasn't there to give lessons, but rather to share Europe's experience, he said the G20 must establish a model of concerted, sustainable growth with a healthy financial sector and free-exchange, which is the least costly way of supporting economic recovery and helping the disadvantaged, he said.
Taxation. The two European leaders stressed the importance of work at an international level, in particular at the OECD, on preventing tax evasion and profit-shifting by multinationals (see related article). “The G20 should finish what we have started in Europe by making the automatic exchange of information the global standard. I will push to start the automatic exchange of information among G20 members as soon as 2015,” said Barroso. Van Rompuy said: “We are ready to tackle aggressive tax planning and profit-shifting and we expect strong support for the OECD's Action Plan on base-erosion and profit-shifting.” (MB/transl.fl)