Friday, 18 September 2009
The leaders from the first 20 developed and developing countries will meet in Pittsburgh, Pennsylvania (a city in the U.S.) on September 24-25 to discuss possible solutions for economic recovery and to deal with the financial crisis. In parallel with this development, a declaration was published after the informal meeting of the EU leaders to prepare a joint stance for the Pittsburgh G-20 Summit thanks to the efforts of the Swedish Presidency on 17th September 2009. The joint stance is defined in eight sub-titles in the declaration.
According to the document, a sustainable recovery should be achieved to develop the basis for sustainable growth and to avoid a repeat of the financial crisis; therefore, the G20 supports the related coordinated policy measures. To do this, financial policies must also be reorganized towards sustainability. Global macroeconomic coordination should be strengthened and a central role should be given to the IMF. Additionally, liberal trade principles should be implemented instead of protectionist measures and, "the G-20 should reiterate its stance against protectionism."
Priority is given to employment in the declaration. The leaders argue that, "a rapid return to employment" is a basis for the sustainable recovery; therefore, it is necessary to implement structural reforms in this field.
The leaders point out that the commitments for financial market reform should be swiftly implemented. For this aim, the declaration mainly argues that the functioning of financial markets should be improved and the important financial institutions should be strengthened.
In the banking sector, the current implications in regard to bonuses (guaranteed for the short-term) are also seen as a problem and leaders think these bonuses should be tied to long-term performance and not be guaranteed in order to make the banking sector more transparent. Therefore, the declaration points out that responsible remuneration practices in the financial sector should be promoted. To do this, a strong link between compensation and long-term performance should be created.
The declaration emphasis on strengthening international financial institutions (IFIs). In the document, the leaders argue that, "the IMF's New Arrangements to Borrow" should be successfully carried out and all of the G20 and other financially strong IMF members should fairly share the responsibilities. Furthermore, the leaders think that a reform for international financial institutions is necessary and, "The Multilateral Development Banks must be adequately capitalised in order to fulfill their core mandate and play a counter cyclical role."
The Declaration also includes a part for the poorest of countries. According to the leaders, the recovery in these countries should be strengthened and, "the commitments undertaken in the framework of the Millennium Development Goals must be implemented" and, "the G-20 should adopt the "Everything But Arms' initiative without delay in order to support people in developing countries suffering from the crisis."
The leaders believe that efforts on climate finance should be shared with other countries and, "the G-20 should call on all parties to significantly step up the pace of negotiations in order to achieve a successful outcome in Copenhagen."
The declaration also covers a sub-title related to energy security which states, "the G-20 should commit to improving energy security by increasing oil and gas market transparency and containing speculation."
The EU leaders have effectively prepared themselves for the Pittsburgh G-20 Summit via preparing the document -Agreed Language for the Pittsburgh G-20 Summit- and this displays that the EU will be a strong bargainer at the G20 summit by putting its collectively prepared "priorities" on the table.
Yilmaz Kaplan (JTW)
