By José Manuel Durão Barroso, President of the European Commission
Introductory remarks by President Barroso following the G20 Summit
Indeed the situation in the Euro area has grabbed a lot of attention at this G20. The latest developments required a lot of extra work on the spot by the EU institutions and from some of the members present here and also it was a matter of attention from other partners. We have responded to these events with determination clearly demonstrating that we will continue to do what it takes to preserve the stability of the Euro.
And I hope that in the conclusions of the G20 Summit the support to our efforts is clear. Indeed around the table there was a clear message of support – in some cases of admiration – for the commitment of the European countries in face of this unprecedented situation that we have been facing.
As you know last week the 17 countries of the Euro area took far-reaching decisions to support Greece and ensure the stability of the Euro. The full implementation of these measures is more necessary than ever and we are committed to see them through.
On Greece our message has been clear: we remain fully committed to support Greece, as a member of our European family, and we stand by the decisions we took last week.
We respect Greek democracy and Greece’s right to decide on its own future. At the same time, we need Greece to demonstrate commitment to the decisions that it has itself subscribed to.
Before the G20 started, I called for national and political unity in Greece, so that hope of a better future can be given to the Greek people. I believe in a situation like the one Greece is facing now national unity is key. It is really needed to have a strong commitment of the main political forces to solve the current difficulties. Consensus among all major political forces is needed to implement the demanding but indispensable measures that will bring lasting economic recovery and stability to the country.
We want Greece to remain in the Euro. At the same time, Greece must decide whether it is ready to take the commitments that come with Euro membership.
We have also discussed this morning some arrangements with Italy. Italy has decided on its own initiative to ask the IMF to monitor the implementation of Italy’s commitments. I see this as evidence of how important Italy’s reform process is for the country and for the Eurozone as a whole. The basis for this monitoring by the IMF is the letter that the Prime Minister of Italy wrote to President Van Rompuy and myself last week and the agreements we reached at the Euro area Summit.
Indeed the European Commission will go ahead with a detailed assessment and monitoring of the Italian situation, in next week we will already go to Italy to make this kind of assessment. And I think everything we can do to ensure the credibility of the efforts of all our Member States is important, not only for the Euro area but also for the global stability.
But of course this G20 Summit was much more than the Euro area issues. We have heard much advice around the table. It is true that it is sometimes easier to solve the problems of the others than one’s own problems, and it was indeed a very good discussion.
But in fact we need to do more to rebalance global growth. This was clearly recognised by our partners. I am very glad to see a collective spirit and sense of responsibility around the table.
We supported the Action Plan for Growth and Jobs. I think it is important to recognise that everybody has to commit to these global efforts to balance the current situation.
I hope also the G20 leaders to agree on the need to step up the resources of the International Monetary Fund not only because of the euro area but in fact because of the global situation, because of the situation of a risk aversion that we are facing and some instability in the global market. I hope the G20 will give a mandate to the Finance Ministers to look into options to bolster the IMF resources, as we did in London 2009, through a menu of options including bilateral loans of G20 Members a new allocation of IMF Special Drawing Rights, or other structures such as a trust fund or an administrative account within the IMF funded by members or other donors. This means we are increasing the global firewall against contagion. It will allow us to act against crisis wherever they occur, in a coordinated and comprehensive manner. This was an important part of our discussions.
Another very important issue was the global financial transaction tax. To be honest, there is some controversy about this. I informed the G20 about the proposals that the Commission has put forward in the European Union. I believe it makes sense to have this kind of financial transaction tax not only to ask the financial sector to give a fair contribution to the common good, but also to use part of this financial transaction tax as a way to support development. We need to do more to support the poorest in the world. And if the member states not only in Europe, but also generally need some more resources it makes sense to ask for those resources from the financial sector that comparatively has been receiving more from the tax payers and probably has not given so much as other sectors of the economy. So there will be in the conclusions some references to the financial transaction tax, not yet, I have to tell, unanimity, but at least recognising the efforts of those that decided to go ahead with it. We in the European Union are determined to do that.
Another important part of the discussion was trade. I am also happy with the conclusions. Frankly speaking, there was a risk. Since the Doha Round has not made a lot of progress there were two risks. One was simply to declare it dead and not to go ahead with the Doha agenda. Another one was to change completely the nature of that mandate. We have decided to save it, namely looking at the concerns of the Least Developed Countries (LDC), because something has to be done recognising also the progress achieved so far. So, the instructions are going to be given to the Trade Ministers and in the European Union to the Commissioner for Trade to come with some progress at the December Ministerial [meeting] in Geneva. So I hope, that on this commitment, and also on the commitment to roll back existing protectionist measures there will be a positive development.
There were many other issues in a very ambitious agenda. One of them I think is of particular importance and I thank France for putting it high on the agenda – this is the issue of food security and agriculture. It shows that G20 is also able to address issues that are not on the core financial area agenda. But there is an understanding that we also need to tackle some excesses that we are seeing in the derivative markets regarding some agriculture and food products. So food security comes also reinforced after this summit.
So a successful summit. Yes, but still, to be honest, a lot to do – a lot to do in Europe, but also a lot to do globally, because we need this kind of global governance and global cooperation for problems that the recent crisis has shown are indeed of a global nature, because we are more interdependent than ever.