Tomorrow in London, for the second time in only five months, the leaders of the world's top 20 economies will be meeting to seek a joint response to the unprecedented global economic crisis that we are going through.
Since this crisis first began, I have advocated the idea that, when faced by a challenge of this magnitude, cooperation is a necessity, not an option. Already in September 2008, speaking to the United Nations General Assembly, I called upon the world to rally together to meet the crisis with a response based on coordination and cooperation.
Brought forward in concert by the European nations, that initiative led to last November's G20 meeting of heads of state and government in Washington, which laid the foundations for far-reaching reform of the international financial system. The London Summit must now enable us to go further, and to put into practice the principles that we established in Washington.
The world expects that we speed up the reform of the international financial system. It expects that we rebuild, together, a new form of capitalism - better regulated - with a greater sense of morality and solidarity. This is necessary for achieving sustainable growth.
This crisis is not the crisis of capitalism. It is the crisis of a system that drifted away from the most fundamental values of capitalism. A system that drove financial operators to be increasingly reckless in the risks they took, that allowed banks to speculate instead of doing their proper business of funding growth in the economy. A system that tolerated a complete lack of control over the activities of so many financial players and markets.
In Washington last November, we agreed on four principles to guide our response to the crisis - enhanced coordination and cooperation, rejection of protectionist measures, strengthening of regulatory systems in financial markets, and new global governance.
What has been achieved to date? On the first two, we have made a good deal of progress. We have managed to hold off the spectre of protectionism, which inevitably compounds existing difficulties. Likewise, all nations have injected massive support for their economies, engaging in ambitious stimulus programmes, while those countries that, like France, offer their citizens a high level of social protection have also significantly increased their levels of crisis-related welfare spending.
The world's leading economies have made comparably gigantic efforts in response to the crisis. These measures are only now beginning to take effect and produce tangible benefits, but we must be ready to do even more if circumstances require it.
This week, however, we must also attach the same level of priority and sense of urgency to making progress on the issue of regulation of financial markets.
The Washington Summit enabled the establishment of several basic principles regarding regulation that must now be put into practical effect. We decided that in the future not one financial player, not one institution, not one product would be beyond the control of a regulatory authority. This rule must be applied to credit rating agencies, but it should also apply to speculative investment funds and, of course, to tax havens.
On the latter point, it is vital we adopt a resolution that clearly identifies these tax havens and sets out in detail the changes we expect them to introduce and the consequences that will ensue, should they fail to respond accordingly.
It is pleasing to observe that the debate on tax havens has begun to bear fruit, in particular in Europe, where several countries recently announced intentions to introduce legislative changes in response to the expectations of the international community.
We need to make progress with our joint reflection on the reform of the disclosure standards and prudential oversight for financial firms. With regard to the reform of global economic governance, we must offer much more space to emerging nations, in keeping with their real weight and with the responsibilities we would like to see them assuming. This holds true for all international bodies, but especially so for international financial institutions.
Lastly, we must provide answers to the problems of those who have been hit hardest by the impact of the crisis. We must raise the level of funding we make available to the International Monetary Fund, so that it can aid those countries facing the most serious difficulties.
I have taken up at the EU level the question of our contribution to the IMF - member states are ready and willing to up their contributions. I have also taken up at the EU level the question of our contribution to the risks that certain countries in Central and Eastern Europe are exposed to - again, member states were ready and willing.
I would also like to emphasise the need, the absolute necessity, for us to offer our support to poorer nations. They are the victims of this crisis. Some now face the risk of seeing their considerable efforts in recent years toward achieving the UN Millennium Development Goals be completely nullified, if we do not show solidarity.
A few days ago I was in Africa. While there, I stated my belief that the destinies of Europe and the African continent are inextricably linked. We will be ready and willing to stand by Africa and by all developing nations in difficulty, on every continent.
I remain convinced that the world can emerge from these troubled times stronger, more united and with a greater sense of solidarity than before, provided we have the will to do so. I am fully aware that we cannot achieve radical change overnight, that there is still a long way to go and that there may well be a need for other meetings, after London, in order to implement the reforms undertaken. I am certain, however, of the need to achieve practical results already this Thursday in London. Failure is not an option - the world would not understand it and history would not forgive us for it.
Global Viewpoint, 2009
