EU leaders hammer out common positions for G20 summit

(Xinhua)
Updated: 2009-09-18 14:58

Swedish Prime Minister Fredrik Reinfeldt, whose country holds the EU rotating presidency, at the press conference after EU leaders held an informal summit in Brussels, Sept 17,2009. [Xinhua]

European Union (EU) leaders hammered out common positions on Thursday for the upcoming summit of the Group of 20 (G20) major economies, calling for continuous efforts of fiscal stimulus and global curbs on bankers' bonuses.

STIMULUS TO STAY

"Efforts must be maintained until recovery is secured," EU leaders said in a conclusion document after an informal summit in Brussels on Thursday, which is designed to coordinate EU position for next week's G20 summit in Pittsburgh, the United States.

Swedish Prime Minister Fredrik Reinfeldt, whose country holds the EU rotating presidency, told a press conference after the summit that the current global economic situation "remains uncertain and risks remain" despite positive signs of recovery.

But he warned the huge stimulus would push up public deficits for governments, so an exit strategy to phase out those measures must be designed now.

"Exit strategies need to be designed now and implemented in a coordinated manner as soon as recovery takes hold, taking into account the specific situations of individual countries," said the conclusion document.

EU leaders also urged strengthened global macroeconomic coordination to address global imbalances, saying that "such coordination should be based on a central role for the IMF ( International Monetary Fund)."

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They called on the G20 summit to reiterate its stance against protectionism and continue to press for progress in trade liberalization, including with regard to a global, ambitious and balanced conclusion of the Doha Round of global trade talks in 2010.

On employment, EU leaders said that laying the basis for a sustainable recovery and sound public finances is the best way to ensure a rapid return to employment, prodding to speed up structural reform.

They stressed that to avoid permanent exclusion from the labor market, particular attention must be paid to maintaining employment, creating new jobs and promoting mobility; upgrading skills and matching labor market needs; and increasing access to employment.

BONUS BUBBLE BURST

As to financial reforms, EU leaders called for global rules to limit bankers' bonuses, a key demand to be presented at the G20 summit.

"On the financial market and bonuses, we have agreed to say enough is enough. We need to move away from the current culture of compensation based on short-term performance," Reinfeldt said.

"The bonus bubble burst tonight," he said. "The G20 plays a crucial role to globally regulate financial markets, not to see a return of the crisis."

 

In the conclusion document, EU leaders said the G20 should commit to agreeing to binding rules for financial institutions on bonuses to their top managers, backed up by the threat of sanctions at the national level.

They said the rules should enhance corporate governance to ensure appropriate board oversight of compensation and risk, and strengthen transparency and disclosure requirements.

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