EU leaders spell out positions at G20
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European Union (EU) leaders on Wednesday spelled out their positions for the upcoming G20 summit in a last-minute call for coordination in exit strategies and renewed efforts to reform financial markets.
"Securing strong and sustainable growth remains our priority. This requires restoring confidence," EU President Herman Van Rompuy and European Commission President Jose Manuel Barroso said in a joint letter to the G20 partners.
The G20 summit in Toronto, Canada later this week comes at a crucial time for the 27-bation bloc, which is facing increased uncertainty over its economic outlook as it switches from stimulus to spending cuts to deal with a sovereign debt crisis among some members.
"Given the major risks that late exit from extraordinary fiscal stimulus would entail for public accounts' sustainability, at the Toronto summit, the G20 should agree on a coordinated and differentiated exit strategy to ensure sustainable public finances," Van Rompuy and Barroso said.
However, the EU's move to a swift fiscal consolidation is likely to prompt fierce debate in Toronto, with the United States voicing concern that an early exit from fiscal stimulus in Europe may undermine economic recovery worldwide.
After explaining European determination to ensure fiscal sustainability in a growth-friendly way, the two EU leaders said they expected all major economies to do their part to achieve the agreed objective of strong, sustainable and balanced growth.
In this context they also "welcome China's decision to proceed further with the reform of the RMB exchange rate regime and to resume the RMB exchange rate flexibility," which was announced by the People's Bank of China, the country's central bank, over the weekend.
Van Rompuy and Barroso called on the G20 to reaffirm its commitment to strengthened financial regulation in areas such as capital requirements for banks, remuneration policies, convergence of accounting standards and the fight against tax havens.
In particular, the two leaders repeated the EU's call for a global deal on bank levies, a demand likely to meet strong opposition from Canada, the host.
"We consider that international work on levies and taxes on financial institutions should continue to maintain a worldwide level playing field," the EU leaders said.
EU member states agreed last week they should introduce systems of levies or taxes on financial institutions and continue to push for a global deal despite obvious division among G20 members.
They also urged G20 leaders to explore the possibility of introducing a global financial transaction tax, which would be more controversial.
On international financial institutions, Van Rompuy and Barroso said the reform of the International Monetary Fund should be completed as a single and comprehensive package by November 2010.
They also highlighted the EU's determination to support the achievement of the Millennium Development Goals globally by 2015 and to achieve its development aid targets.
The two leaders underlined the central role of trade to any framework for strong, sustainable and balanced growth, calling for continuous efforts to fight against protectionism.
