Prime Minister's statement on G20
Prime Minister David Cameron delivered a statement on 25 June 2012 to the House of Commons regarding the G20 summit.
Introduction
Mr Speaker, the G20 needed to address the five big threats to the global economy.
First, the problems in the Eurozone.
Second, the mountain of debt and persistence of imbalances in the world economy.
Third, the lack of growth.
Fourth, the rise of protectionism.
And fifth, the failure to regulate our banks properly.
Let me take each in turn.
Eurozone
First, the Eurozone.
Britain is not in the Eurozone and we are not going to join.
But when 40 per cent of our trade is with the Eurozone, its future affects our future.
It is in our national interest for the Eurozone to resolve its difficulties.
As full members of the European Union - and a significant net contributor to its budget - it is vital that we speak plainly about what needs to happen
In the short term we need rapid action by the core of the Eurozone, including the European Central Bank, to restore financial stability and confidence to the countries on the periphery of the Eurozone as they undergo their vital structural reforms.
This needs to be reinforced in the medium term by improvements to the governance of the Eurozone that recognise the remorseless logic of being in a currency union.
At this Summit, the Eurozone countries made some steps towards both.
They agreed to take all necessary policy measures to safeguard the integrity and stability of the Eurozone including breaking the link between sovereign debt problems and bank instability.
And they committed to take further steps towards fiscal and economic integration, including through a banking union.
Britain does not want to stand in the way of these measures towards closer integration of the Eurozone.
But we will not be part of them.
We didn’t join the Eurozone precisely because we didn’t want to give up the kind of sovereignty over our national economy that is essential to making a currency union work.
And we have been clear that whatever long term decisions are made about the governance of the Eurozone, the rules that govern the single market must always protect the interests of all its 27 members.
This is a red line for Britain - it is vital to our national interests.
The Eurozone now needs to get on with implementing the agreements reached at the G20.
And I will be working at the European Council this week to make sure the Eurozone takes these steps in a way which protects the UK’s interests.
Mr Speaker, to deal with the wider risks of contagion to the global economy the G20 also welcomed the commitments to increase the resources available to the IMF by more than $450 billion.
It is a basic principle of the IMF that the help it offers is for countries not for currencies.
Indeed almost all of the IMF’s 50 programmes are for countries outside the Eurozone.
No country has ever lost money lending to the IMF.
Britain’s contribution is a loan - on which interest is payable.
And it will only be used if troubled economies meet strict conditions to get their economies back on track.
Debt and imbalances
Second, debt and imbalances.
As at the G8, there was absolute agreement that deficit reduction and growth are not alternatives.
You need the first in order to get the second.
The G20 also reaffirmed its commitment to reduce global imbalances with deficit countries strengthening their public finances and surplus countries taking further actions to increase demand and move towards greater exchange rate flexibility.
We welcomed in particular China’s commitment to allow market forces to play a larger role in determining movements in its exchange rate and to continue reform and increase transparency in their exchange rate policy.
This is an important advance for the G20 in dealing with global imbalances - one of the underlying causes of the crisis in 2008.
Growth
In a debt-driven crisis where many countries lack the fiscal space to stimulate their economies, the most powerful tools for growth that we have are monetary activism and structural reform.
The G20 agreed that monetary policy should continue to support the economic recovery.
And every G20 country has put on the table specific structural reform commitments to strengthen global demand, foster job creation and increase growth potential.
The Los Cabos Growth and Jobs Action Plan includes mechanisms to hold G20 Members accountable for delivering on the reform commitments made.
Vitally for Britain, this includes completing the European Single Market.
The G20 didn’t just focus on growth in the largest economies - it also reaffirmed its vital commitment to supporting private sector led growth in the poorest countries, as the best way of helping people to lift themselves out of poverty.
And Britain led a significant break-through on two of the biggest barriers to a successful private sector in developing countries.
First we drove forwards the G20’s anti -corruption plan - including securing agreement on important new principles which will deny entry to all G20 countries by corrupt officials or those who corrupt them.
Second, on the inability of farmers to access the technology that makes their farming viable, Britain made a substantial contribution to the AgResults initiative which will harness the creativity of the private sector to help put new technology in the hands of the world’s poorest farmers.
We will be building on this further at our special on event on hunger at the Olympics in London in August.
Protectionism
Fourth, on trade, we expressed our deep concern about rising instances of protectionism around the world.
The President of Argentina had a number of arguments during this Summit - not just with me - and it was made very clear to her that recent behaviour by Argentina on both investment and trade protectionism was not acceptable.
Mr Speaker, at this G20 free trade again won the day.
We extended our commitment to avoid any new protectionist measures until the end of 2014 and agreed to roll back new protectionist measures that have arisen, including new export restrictions.
Most significant of all, the US and Europe reached a groundbreaking political agreement to move forward with a deep but credible trade agreement, with a clear and agreed timetable.
The EU-US High Level Working Group will now produce recommendations for taking this forward, by the end of this year.
Mr Speaker, the EU and US make up half of the world’s GDP, so completing a deal here could provide an enormous boost to growth across the world.
And that means jobs and growth for Britain.
Financial regulation
Fifth on financial regulation, this G20 maintained the political impetus behind the reform of regulation across the global economy.
We endorsed the strengthening of the Financial Stability Board in holding all G20 countries to account for delivering on their commitments something specifically recommended by the UK report on global governance at the Cannes Summit last year.
And we agreed to push forwards with completing the implementation of Basel III.
Foreign policy
Finally, Mr Speaker, in the margins of this Summit, I had useful discussions on some of our key foreign policy priorities.
On Syria, where the regime continues to pound civilian areas with mortars, attack helicopters and snipers the EU is today, as a result of UK efforts, extending sanctions to ban any EU companies from insuring ships taking arms to Syria.
We will continue work with our international partners, including through the United Nations to stop the appalling slaughter and help forge a political transition to a democratic future, which protects the rights of all its communities.
Finally, Mr Speaker, on the Falkland Islands, I took the opportunity to emphasise the importane of the Referendum to President Kirchner.
The Islanders have to put up with endless attempts at endless summits to put a question mark over their future.
They want to determine that future themselves.
No one should be in any doubt that as far as the British government is concerned, it is the Falkland Islanders who will determine the sovereignty of the Islands.
And their view will be respected by this House, by this country and by the world.
And I commend this Statement to the House.