Legitimacy of G20. These are not simply good intentions and promises. The final declaration from the G20 is more concrete and feasible than anything previously affirmed. The political forces fighting to get rid of the market economy entirely obviously have the right to express their views and ideas, but they would have more credibility if they managed to obtain election votes (in countries where fair elections are held and democracy functions) that were less peripheral and that would at least partly justify their claim to speak on behalf of the people. The regimes that ban free elections when they are in power or the political forces that do not accept the results of the elections do not have the right to resort to violence. The G20 summit was fairly representative of the global situation and brought together the main economies from all over the world. It unanimously approved the plan to save or create millions of jobs, increase world production by 4% and speed up the transition towards a “green” economy through environmental protection. Let's respect its conclusions.
What counts now is to follow up the commitments and put the measures announced into practice. It is certain that not all the objectives will be attained. This has never happened and never will. The countries involved, however, appear determined to take action. The orientations retained broadly encapsulate what the EU previously suggested (see this column yesterday). The result exceeded all expectations. For example, the speed with which the warnings on tax havens were defined, was staggering: the OECD's black list (EUROPE 9876) became pointless because two countries (Guatemala and Brunei) escaped it at the last minute and the four other countries on it have just announced that they accept OECD standards (see following pages). The G20's announcement that “the era of banking secrecy is over” comes as no surprise. The governor of an important central bank pointed out that “reforms unthinkable six months ago have now been decided”. The apparent objective is to establish a comprehensive framework of rules and future supervision for the financial sector that clearly specifies the operational measures, which, for example, extend mandatory supervision to hedge funds and introduce sanctions against tax havens that buck OECD rules.
EU timetable. In this context, Europe is at the forefront and is already putting G20 orientations into practice. In the implementation of new rules, the EU has to a large extent gone further than the stage of intentions and principles and now has detailed orientations and several texts prepared or almost drawn up. The president of the Commission, José Manuel Barroso, confirmed and outlined the Commission's timetable for proposals: 21 April for executive pay, hedge funds and private equity; 7 May for common principles on protecting and creating jobs; before the end of May for projects involving future supervision structures (incorporating most of the conclusions from the Larosière report), so that in June the European Council can define the architecture to be implemented in 2010. The European Parliament is pro-actively performing its role of co-legislator. The EU will have a pioneering role to play in the revolution of world finance and at a domestic level, it will soon be introducing the measures it is currently preparing and whose outlines have already been significantly defined. Finalisation is not going to be easy because several aspects of member states' orientations are not all the same but senior level political authorities appear determined to press ahead.
Hands off the euro. On one point, however, the EU will not give way: weakening the euro and the conditions for joining it. An IMF services document did look at speeding up and simplifying single currency accession conditions for EU countries that are not yet part of it, which, for the main part, are member states from Central and Eastern Europe and (according to some indications) Ukraine. This orientation was firmly rejected by the European Central Bank (ECB), as well as the major countries from the eurozone. Even the countries involved do not support it. EU countries experiencing difficulties will benefit, and already are benefiting, from European support and from assistance from relevant international bodies, but any weakening of the euro should be totally ruled out. It represents Europe's strength and its shield against monetary instability. The hypothesis of compromising these characteristics or the role of the euro, are nothing but the wild imaginings of the experts. (F.R./transl.rh)