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10 November 2010

Presidents Barroso and Van Rompuy: Taking global action for balanced growth at the G20 summit in Seoul


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They call on the G20 to "recognise that economic imbalances are a common concern.” They propose using current account imbalances as an indicator to trigger an assessment of the possible root causes of impediments to adjustments.



President Barroso said: "Sustaining the recovery and laying the foundations for strong and more balanced growth remains a significant policy challenge. As we move into a new economic phase, there is a risk that the momentum for cooperative action might weaken. We have succeeded in the first stage and have prevented the boat from sinking. We now have to steer it to port. I particularly welcome the fact that the G20 will now add development issues to the agenda, and I hope that the summit will give a clear orientation for the Doha Trade Development Round."
 
President Van Rompuy emphasised: "The G20 has shifted its focus from immediate crisis response to longer-term global economic coordination. With an ambitious agenda, the Seoul summit will be a real delivery test for the G20 to act as the premier global forum for international economic cooperation. We are confident that it can lead the global economy out of the crisis and find cooperative solutions to recent tensions. The stakes for Seoul are high - for the credibility of the G20 and for each of its members. What we agree in Seoul will pave the way to the future."
The key issues for the Seoul summit will be the implementation of the Framework for strong, stable and sustainable growth, endorsing and taking further the reform of the International Monetary Fund, keeping up the momentum for financial regulatory reform and giving a political impulse for a rapid conclusion of the Doha Round and a successful Cancún climate conference. Development will be on the G20 agenda for the first time, and facilitate trade and investment in development countries in a cooperative spirit among advanced and emerging economies.
In a joint letter of 5 November to the other G20 leaders, President Barroso and President Van Rompuy, had set out their views on these key issues on the G20 agenda.
 
The two Presidents call on the G20 to "recognise that economic imbalances are a common concern, and that all major economies must to do their part to achieve rebalancing." They propose using "current account imbalances as an indicator to trigger an assessment of the possible root causes of impediments to adjustments," while referring to the EU's internal alert mechanism to trace economic imbalances. They also call for a "clear political commitment to cooperative and lasting solutions to the current tensions in currency markets, to allow exchange rates to be set in line with market fundamentals and to refrain from competitive devaluation of currencies. G20 members should consider the possible effects on their partners and the global economy and refrain from actions that may have negative spill-overs."
 

 



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