9th Dec 2019

US and EU find common ground on global financial reform

  • George W. Bush will host the G20 meeting in Washington this Saturday, but concrete decisions are expected at a second summit, after President Barack Obama takes office. (Photo: Irish Presidency)

As he prepares to host a G20 meeting on Saturday, outgoing US President George W. Bush has said he has found "common ground" with European leaders on how to address the financial crisis. However, the specifics of global reform of financial regulation are unlikely to be agreed before president-elect Barack Obama takes office.

"We believe there is a great deal of common ground among our approaches to address the turmoil in the financial markets, and President Bush looks forward to discussing how to best advance reforms to global financial markets with a wide range of leaders," White House spokesperson Dana Perino said on Saturday (8 November).

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President George W. Bush will host a summit of the world's 20 leading industrialised and emerging countries in Washington on 15 November, but the expectations are that any concrete reforms will be developed only after a second summit early next year in which the incoming Obama administration participates.

EU leaders gathered at a summit in Brussels on Friday agreed to tighten worldwide oversight of the financial sector. Concrete proposals include revised accounting standards, closer supervision of credit rating agencies and hedge funds, an early warning system to tackle risks and a central role for the International Monetary Fund (IMF) "in a more efficient financial architecture."

"We agree with European leaders on the importance of identifying common principles to guide reforms, setting out a process to implement those principles promptly, and proceeding with actions on certain reforms immediately," Perino said, though remaining vague on the specifics of the reforms.

Mr Bush and other administration officials have been pressing for the gathering of the G20 nations next week to also re-affirm support for free market principles, expanded trade and increased investment and capital flows, Reuters reports.

Kouchner to meet Obama aides

Meanwhile, French foreign minister Bernard Kouchner will meet aides to president-elect Barack Obama as well as current secretary of state Condoleezza Rice during a visit to Washington on Tuesday and Wednesday.

The minister will be the first French official to travel to Washington since Obama's election victory, hailed in Europe as a great opportunity to strengthen EU-US relations, which were very much strained during the Bush administration.

Mr Kouchner said last Thursday that Mr Obama's election raised "hope on all fronts including the Middle East, Iran - whether there will be a dialogue or not - Afghanistan, Pakistan and relations with Russian and China," while warning that Europe would not give a "blank cheque" to the incoming US administration.

A letter agreed last week by EU's 27 foreign ministers to set out a new course for trans-Atlantic relations would not be handed over now by Mr Kouchner, but only after Mr Obama takes office on 20 January, AFP reports.

Spain to join the G20 meeting on a French seat

Initially not invited to join the G20 meeting, Spain is now to participate at the Washington financial summit after France ceded one of its two seats to Madrid. France unusually has two seats at the summit as it was also entitled to one as current chair of the EU's six-month rotating presidency.

Spanish Prime Minister Jose Luis Rodriguez Zapatero on Saturday thanked French President Nicolas Sarkozy and President Bush for supporting his country's claim to take part, which he called a first step towards the country regularly participating in global economic forums.

Zapatero stressed the need for the summit to reconsider the leadership roles assigned to the various groupings of world economic powers such as the G8 or G20 and said Madrid would advocate high standards of transparency and supervision for the international financial system at the Washington meeting.

Absent from the participants list to the G20 meeting was also the president of the Eurogroup, Luxembourgois Prime Minister Jean-Claude Juncker, who said on Friday he was "not offended" by this, as the EU already had agreed on common principles to put forward in Washington.

However, he stressed that Spain, the world's eighth largest economy, was very important and deserved a "full seat", not a "demi-seat" or a "mini seat" shared with the French EU presidency. He also called it "an aberration" that the African Union was not represented at the G20, when Africans were the first victims of the global financial and economic crisis.


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