Financial Regulatory Forum

HIGHLIGHTS-Officials’ comments at end of G20 summit

By Reuters Staff
September 26, 2009

U.S. President Barack Obama (R) and White House trip director Marvin Nicholson arrive at the Phipps Conservatory for an opening reception and working dinner for heads of delegation at the Pittsburgh G20 Summit in Pittsburgh, Pennsylvania September 24, 2009. REUTERS/Philippe Wojazer (UNITED STATES POLITICS BUSINESS) PITTSBURGH, Sept 25 (Reuters) – Following are excerpts of comments by leaders and other officials from the Group of 20 on Friday at the end of their two-day meeting in Pittsburgh.

GLOBAL ECONOMY

U.S. President Barack Obama
“It is worth recalling the situation we faced six months ago — a contracting economy, sky-rocketing unemployment, stagnant trade and a financial system that was nearly frozen. Some were warning of a second Great Depression.”
“But because of the bold and coordinated action that we took, millions of jobs have been saved or created, the decline in output has been stopped, financial markets have come back to life and we stopped the crisis from spreading further to the developing world.”
“Still, we know there is much further to go.”
“First, we agreed to sustain our recovery plans until growth is restored and a new framework for prosperity is in place … But we can’t stop there. Going forward, we cannot tolerate the same old boom-and-bust economy of the past. We can’t grow complacent.”
“Second, we agreed to take concrete steps to move forward with tough new financial regulations so that a crisis like this can never happen again … Those who abuse the system must be held accountable…”
“Third, we agreed to phase out subsidies for fossil fuel … This reform will increase our energy security. It will help transform our economy so that we’re creating the clean-energy jobs of the future. And it will help us combat the threat posed by climate change.”
“Finally, we agreed to reform our system of global economic cooperation and governance. We can no longer meet the challenges of the 21st century with 20th century approaches. And that’s why the G20 will take the lead in building a new approach to cooperation.”

Canadian Prime Minister Stephen Harper
“Although we are seeing signs of economic recovery, the gains are fragile at best. We must stay the course. This is no time to be sinking into complacency.”
“We’ve still got big work ahead of us … We’re not out of the woods on the recession.”

British Prime Minister Gordon Brown
“G20 leaders today confirmed that our combined response to last year’s collapse in the global economy, the response we agreed in London in April, has been successful. To quote the communique: ‘It worked’”
“And today we have gone further. We agreed:
- To sustain our strong policy response until a durable recovery is secured and avoid a premature withdrawal of the stimulus. As a result of our action this year and next, we estimate that 15 million jobs can be created or saved.
- To launch a framework, a compact for strong sustainable and balanced growth. This heralds a new era of global economic management to ensure there is no repeat of the crisis we have witnessed.
- To fundamentally reform the banking sector, including reforming the bonus system to reward long-term success and avoid excessive risk-taking — there can be no return to the old ways. The commitment on bonuses will bring an end to the unacceptable and disgraced old system — with bonuses now subject to deferral, clawback and the right of regulators to limit compensation.”
“Here in Pittsburgh, leaders representing two-thirds of the planet’s population have agreed to a global plan for jobs, growth and a sustained economic recovery.”
“This week, we have taken steps towards building a better world.”

Japanese Prime Minister Yukio Hatoyama
“When demand and consumption was strong in the United States, Japan relied on external demand to develop enormously. Even now, Japanese industry relies quite extensively on external demand.”
“But world consumption is falling amid the financial crisis that began in the United States. In this age, Americans also believe they have to raise their savings.”
“The economic model of relying on external demand may no longer be able to lead Japan’s economy. So we believe we must conduct policies to stimulate consumption even more than in the past.”

Brazilian President Luiz Inacio Lula da Silva
“We decided no country should stop their counter-cyclical policies. The global crisis is not over — it is easing in some countries but it is still strong in others.

Saudi Arabian Finance Minister Ibrahim al-Assaf
“Everyone agrees we should think about the exit strategy but not yet talk about implementing the exit strategy.”
“It is still premature and we could still have a setback so it is too early to start a program of exit from stimulus packages and again I think it should be country specific.”

Indian Prime Minister Manmohan Singh
“There is no economic crisis in India. It is certainly true that as a sequel to the global economic crisis, our exports have suffered. That has effected the rate of growth. But even then, our economy is growing at a rate of 6.0 to 6.5 percent.”

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BANKERS’ BONUSES

Swedish Finance Minister Anders Borg
“What was accepted here today is that we cannot regulate greed and greed will return after this crisis. But we have now got agreement on how we can at least balance this greed.”

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TRADE

World Trade Organisation Director-General Pascal Lamy
“Today the leaders have clearly spoken about what they expect on the Doha round, a conclusion in 2010. It is now up to their negotiators to walk the talk, starting Monday in Geneva.”

Indian Prime Minister Manmohan Singh
“I think things could be worse as regards to protectionism. There is evidence of creeping protectionism, which has not reached an alarming rate.”
“India is worried about protectionism facing its products in many developed countries, the United States included.”
“The United States is as interested as any country (in getting a Doha deal) and I have no reason to doubt his (Obama’s) sincerity.”

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G20 AND IMF REFORMS

British Prime Minister Gordon Brown
“The G20 is now the premier forum for our international economic cooperation.”

Brazilian President Luiz Inacio Lula da Silva
“The G20 has now an exceptional role in the new world order, in the regulation of financial markets.”
“I know how it is like to meet rich countries before and after the crisis. It is like going to the hospital — when we are fine we never think we’re going to get sick but when everybody is moribund at the hospital, everybody is humbler and simpler, everybody wants help.”
“If you had participated in a negotiation (on IMF voting rights) demanding a 7 percent increase and getting 5 percent instead, you would have gotten more than 50 percent. That is an extraordinary victory.”
“It is not only about the numbers but also about the flexibility of governments and institutions that believed the world did not need to change.”

Japanese Prime Minister Yukio Hatoyama
“I do not believe we should abandon G8. I mentioned this at the working dinner yesterday but it is hard to debate and reach a conclusion when you have 20 or 25 people gathered.”
“Bureaucrats have to do a lot of the coordinating. In the end, the more you try to get a good result at G20, the more bureaucrats’ thinking comes to the fore.”
“I think there are very few themes on which you can debate and reach a conclusion at G20. At G8, there can be lively debate among the politicians themselves.”

Italian Prime Minister Silvio Berlusconi
“I do not believe it (that the Group of Eight is dead) … The G8 comprises eight countries which are united by the same vision of the economy, by the same values and principles. The G8 remains valid.”

Saudi Arabian Finance Minister Ibrahim al-Assaf
“Whether it is IMF or World Bank or other institutions, now everybody recognizes the role of developing countries in the world economy.”
“This has been a very difficult point that took a lot of discussion … The emerging countries insisted that the increase should come from advanced economies.”
“It is not as clear as we want it to be but at least it will serve the purpose.”
“It is too early to talk about what is the impact on each country whether increasing or decreasing or whatever but the IMF board will work on the formula of who will be increased, who will be reduced and these issues will take some time.”

Indian Prime Minister Manmohan Singh
“The interdependence of nations is a fact of life and interdependence in a globalized world means that no country, however powerful it may be, can take on the entire burden of economic adjustment and economic decision making that may be required to manage the global system in an orderly fashion.”
“With the rise of India, China, Brazil, economic decision making has take into account the views of these countries if it is to have its optimum impact.”

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IRAN AND NUCLEAR ISSUES

U.S. President Barack Obama
“Iran is on notice that when we meet with them on October 1st they are going to have to come clean and they are going to have to make a choice.”
“Are they willing to go down the path which I think ultimately will lead to greater prosperity and security for Iran, giving up the acquisition of nuclear weapons and deciding that they are willing to abide by international rules and standards in their pursuit of peaceful nuclear energy?”
“Or will they continue down a path that is going to lead to confrontation?”
“The international community has spoken. It is now up to Iran to respond.”
“We do not rule out any options when it comes to U.S. security interests.”

Russian President Dmitry Medvedev
“I have said we should create a system of incentives for Iran … If they do not work, cooperation does not work, other mechanisms of which I spoke should be used.”

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CLIMATE

Swedish Prime Minister Frederik Reinfeldt
“During the lunch … we agreed to go away and come back and speak to each other in a few weeks and we felt we should meet possibly before Copenhagen, even via video conference or something. But we may have a meeting.”
“The consensus around the table was that if we want to achieve the breakthroughs necessary for Copenhagen it must come from us leaders first.”

European Commission President Jose Manuel Barroso
“We will only achieve a full and sustainable recovery if we also tackle climate change and kick-start trade. This is a test of credibility for the G20 — failure is not an option.”
“I do not hide my concern at the slow rate of progress. Negotiations cannot be an open ended process. It’s time to get serious now, not later.”

Italian Prime Minister Silvio Berlusconi
“There will be a meeting in the coming weeks in New York to prepare the conference in Copenhagen.”
“In Copenhagen we don’t expect a treaty but an agreement to be put into practice over time.”

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AFGHANISTAN

U.S. President Barack Obama
“What’s most important is that there is a sense of legitimacy in Afghanistan among the Afghan people for the Afghan people. If there is not, that makes our task much more difficult.”

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FUEL SUBSIDIES AND OIL MARKET VOLATILITY

Saudi Arabian Finance Minister Ibrahim al-Assaf
“We always stress that we should not discriminate against petroleum products by overtaxing them. We are not against removing inefficient subsidies but the communique talks about still subsidizing the poor.”
“This is something we stressed in all our meetings and it is part of helping the poor to get clean and efficient energy sources regardless of the source.”
“There were some discussions with regard to the havoc that international instruments have played in the oil markets.”
“This is something we have been screaming about for ages and now the world is realizing that derivatives instruments have played a role in having oil shooting up to $100 and then falling again to 30.”
“Now the international community is recognizing that there should be more supervision of these instruments.”

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