In view of the forthcoming G20 Summit in Cannes, Ambassador Jean-David Levitte, Diplomatic Advisor and Sherpa of the President of France, met with ILO constituents and staff in Geneva to share some of the priorities ahead of the summit and inform on preparative work done so far. In his view, France places great importance on opening the G20 to the entire international community, as the Group cannot and must not become a closed and exclusive club. Even though G20 Member States account for 85 per cent of world GDP, opening up to other countries is a prerequisite for the Group’s legitimacy.
Since 2008, previous G20 Summits and preparatory meetings focused on the crisis, its aftermath and policy measures to be taken in recovery. Throughout the 2008-2010 recession and recovery period, G20 efforts concentrated mainly on restoring the financial system, finding appropriate measures to mitigate the crisis’ effects, reforming the international financial institutions and developing new models of growth. Recent economic developments in developed, emerging and developing countries show that these efforts must continue. The G20 Summit in Cannes will deal with the crisis affecting not only the eurozone and the United States, but also emerging and developing countries. In the immediate future, some countries will have to deal with measures to support the economy, others with the consolidation of their public finances, others still with shifting their economic model towards domestic consumption. At Cannes, France will urge the Leaders to adopt a plan of action for growth drawing on concrete economic policy measures taken by the United States, China and several countries in the eurozone, Japan, the United Kingdom and Brazil.
The eurozone and restoring economic confidence
Ambassador Levitte highlighted two main tracks of discussion to be held in Cannes. Firstly, he reiterated France’s support and commitment to Greece to ensure the future of the euro and thus of the European Union. France will assist the Greek administration in accessing the EU structural funds the country is entitled to. The permanent exchanges between President Nicolas Sarkozy, Chancellor Angela Merkel and the Troika (IMF, European Central Bank and the European Commission) are proof of that pledge. Secondly, restoring economic confidence requires global efforts beyond the G20, as the economic interdependence between countries leads to a quick spread of imbalances whenever and wherever they occur.
The international monetary system
The much needed reform of the international monetary system and the fight against excessive price volatility are not only useful in order to better regulate globalization, but they are now complementary to the growth action plan. “We can all see that it is now essential to make progress towards a new international monetary order, which reflects the new economic realities and avoids the imbalances of foreign exchange markets which almost degenerated into a currency war only a year ago”, Ambassador Levitte said. “We can all see that the chaos on the commodity markets, which led to huge fluctuations in agricultural and energy prices, is a hindrance to growth, and even worse, is directly responsible for humanitarian disasters”, he added.
Regarding the reform of the international monetary system, in March in Nanjing the G20 countries reached an agreement on nine specific areas of action, among which Ambassador Levitte highlighted the following four:
- The composition of Special Drawing Rights by the IMF: the G20 is working in particular on the integration criteria for new currencies in the Special Drawing Rights (SDR) basket.
- A reference framework for managing capital flows: there must be common references in order to respond to sudden capital inflows or outflows, especially in countries which have been confronted with this type of problem (such as Brazil).
- Strengthening the response to systemic shocks through the establishment of new IMF credit lines, intended even for countries which are well managed but exposed to a global crisis. The IMF should connect its instruments as much as possible to the mutual support funds created in Europe through the European Financial Stability Facility and in Asia through the Chiang Mai agreement.
- The G20 is working to strengthen the IMF’s multilateral monitoring, in particular with regard to the effects of the economic and financial contagion of a country, or a region, on the rest of the world.
The social agenda
An effective response to the crisis must include a renewed and shared focus on employment, social protection and social rights. At the recently concluded G20 Meeting of Labour and Employment Ministers (Paris, 26-27 September 2011), the Leaders reached agreement on the following policy recommendations:
- Improve active employment policies, particularly for young people and other vulnerable groups
- Strengthen social protection by establishing social protection floors adapted to each country
- Promote effective application of social and labour rights
- Strengthen the coherence of economic and social policies
Ambassador Jean-David Levitte and ILO Director-General Juan Somavia meeting ILO constituents and staff.
Jobs and unemployment re