Informal meeting of EU Heads of State or Government in Brussels
18 September 2009
EU Heads agreed that, in order to develop a basis for sustainable growth, and taking into account the specific situation of individual countries, exit strategies need to be designed and implemented in a co-ordinated manner as soon as recovery takes hold.
The G-20 should reaffirm its determination to continue implementing co-ordinated policy measures in order to develop the basis for sustainable growth and to avoid a repetition of the recent financial crisis. Efforts must be maintained until recovery is secured. Overall support to the EU economy in 2009 and 2010 is projected to amount to around 5 per cent of GDP. Taking into account the specific situations of individual countries, exit strategies need to be designed and implemented in a coordinated manner as soon as recovery takes hold.
EU government and state heads heard details of the report on the future of international economic co-operation and co-ordination to be submitted by the G-20 President to the Pittsburgh meeting. With regard to the current financial markets situation, they highlighted the following issues:
· Improving the functioning of financial markets is essential in order to avoid a repetition of the crisis. The commitments agreed at the London summit must be implemented. The G-20 should commit to a globally coordinated system of macro-prudential supervision, based on close co-operation of the IMF, the FSB and the supervisory authorities, with effective exchange of information.
· The functioning of the banking system remains critical to restoring growth and re-establishing credit flows. In order to safeguard the long-term viability of banks, a restructuring of the banking sector must take place, in parallel with actions to improve the quality of bank balance sheets.
· All G-20 countries must adopt the Basel II capital framework in a consistent and co-ordinated way. Existing loopholes in the Basel framework must be closed.
· Accounting standards-setting bodies need to accelerate their joint work on a single set of high-quality global accounting standards, with all G-20 countries committing to implement these new standards as soon as possible.
· The G-20 must strengthen oversight of systemically important financial institutions by enhancing their supervisory and regulatory requirements (i.e. through tailor-made stress tests, contingency plans and capital buffers). The quality of cross-border supervision needs to be improved and the G-20 should commit to work in a co-ordinated manner on this issue.
· In particular, the G-20 should commit to agreeing to binding rules for financial institutions on variable remunerations backed up by the threat of sanctions at national level.
