G-20 letter urges keeping pledges

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G-20 letter urges keeping pledges

Leaders of Korea, Canada, the United States, the United Kingdom and France issued a joint letter yesterday to the Group of 20, urging their governments to reaffirm international cooperation through the multilateral forum and fully implement past agreements through upcoming summits of this year.

“As the past, current, and future chairs of the G-20 Leaders’ Summits, we are writing to you today to emphasize the need to implement our commitments to ensure strong macroeconomic policy cooperation and to continue our regulatory reform to strengthen the international financial system,” the letter said. President Lee Myung-bak of South Korea, Prime Minister Stephen Harper of Canada, U.K. Prime Minister Gordon Brown, U.S. President Barack Obama and French President Nicolas Sarkozy signed the letter. The next summit takes place in Toronto in June.

“We have worked on the letter for some time,” said Sohn Jie-ae, spokeswoman of Korea’s G-20 preparation committee. “It is an expression of the five leaders to fully support the G-20 summits’ preparations and implement the agreed agendas.”

Naming the first objective as “the return to sustained growth and job creation,” the five leaders urged the member countries to “move quickly” to implement the framework agreed to during the last summit in Pittsburgh.

“Following the completion of the IMF’s report on the collective consistency of our national policies, we will need to agree in Toronto on the major risks to global economic stability and sustained growth, and policy options on which we will base the actions we must take together to minimize these risks,” the letter said. “We will also need to develop more specific policy recommendations for our Seoul Summit in November.”

The five leaders also said reforms of the International Monetary Fund and the World Bank must be completed by the deadlines the G-20 agreed to in Pittsburgh. Sohn said the reform of the World Bank will mainly take place in May, while the IMF reform will continue until January next year.

The five leaders also said that G-20 economies must coordinate their domestic financial reform legislations to reaffirm their commitments “to address the weaknesses that led to the financial crisis.”

The letter reaffirmed the existing agreements on developing strong international rules on capital and liquidity, over-the-counter derivatives and remuneration practices. A framework to address systemically important financial institutions to reduce moral hazard should be established, the leaders said, adding that prudential standards should also be proportional with the costs of the institutions’ failure.

The leaders also urged the G-20 members to reaffirm their commitments to fight trade protectionism and to implement other existing agreements by their deadlines.

“Now is the time for the leaders of the G-20 both to recommit themselves and deliver on the ambitious reform objectives and agenda we have already agreed to and to explore cooperative approaches to meeting our common goals,” they said. “We all know that an agreement to act is just a start. It is acting on the agreement that matters.”


By Ser Myo-ja [myoja@joongang.co.kr]

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