10th Dec 2022

France and Germany unite positions ahead of summit

  • “We defend a totally identical position," said Ms Merkel (l) (Photo: European Communities, 2008)

France and Germany on Thursday (12 March) agreed that the emphasis at the upcoming G20 meeting in London should be on greater financial regulation and rejected calls coming from the US to increase spending as a way to deal with the crisis.

During a meeting of their cabinets in Berlin, the two countries "underlined their determination to pursue and strengthen the co-ordination of their economic policy in the face of the financial and economic crisis and to work together so that such a crisis does not reproduce itself," reads a joint declaration of German Chancellor Angela Merkel and French President Nicolas Sarkozy.

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They said they would stand united in calls for more financial regulation and for the April G20 summit in London to achieve "substantial and concrete results" on that point.

"We defend a totally identical position," Ms Merkel was quoted as saying by Reuters.

Mr Sarkozy also underlined that at the G20, France and Germany would "make the same proposals, defend the same convictions and have the same demands for results."

The French president also indicated that he and Ms Merkel could "take a common initiative before the G20 that we will communicate in due time."

EU – US split

The two countries' display of unity comes after recent calls from Washington that governments around the world should focus more on additional fiscal measures than on regulation as a reaction to the global turbulence.

It also underlines a growing split between the EU and the US.

"Fiscal stimuli are important – and Europe has made its contribution in this regard – but they cannot replace the necessary regulation," Ms Merkel said.

"In Europe, we have invested a lot into growth. The priority now is not to spend more but to put in place a system of regulation that will stop such a catastrophe from happening again," Mr Sarkozy underlined.

"We do not want to spend more money," he was quoted as saying by the International Herald Tribune.

On Thursday, European Commission President Jose Manuel Barroso also defended the European position as opposed to the American one and stressed that more regulation was what the G20 would need to focus on.

"When we talk about fiscal stimulus, it's not the same thing in the US and in Europe because the Americans usually think about discretionary additional fiscal stimulus," Mr Barroso said at a press conference in Brussels.

"I would like to see the European ambition matched by others, regarding new rules of supervision and regulation of the financial sector," he added.

EU leaders to reiterate regulation calls

The statements come as the EU's 27 member states will be meeting in Brussels next week in order to discuss the financial crisis and the best ways to tackle it.

The bloc's leaders will put a specific emphasis on preparing for the G20 summit and are expected to re-iterate the calls for more financial regulation.

In a four-page annex to the conclusions they are to adopt after their meeting – a draft of which has been seen by EUobserver, EU heads of state and government are to present an "agreed language with a view of the G20 summit in London."

Among other things, they will call to "strengthen transparency and accountability to avoid pitfalls of the past, in particular by making macro-prudential supervision standard part of the financial sector oversight."

"Appropriate regulation or oversight of all financial markets, products and participants that may present a systemic risk, without exception and regardless of their country of domicile" should also be ensured, reads the draft.

The EU leaders will also insist on the need to reform "the governance of international financial institutions," in particular the International Monetary Fund, whose resources they would like to see doubled "so that the fund can help its members swiftly and flexibly if they experience balance of payments difficulties."


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