G20 Information Centre
2011 Cannes Summit Performance Assessment:
Kelsey Komorowski, G20 Research Group
November 9, 2011
The following assessment draws on the objectives and rationales stated in "Press Gaggle to Preview the President's Trip to Cannes, France for the G20 Summit," 31 October 2011.
NOTE: The United States established the following objectives prior to Prime Minister’s Papandreou’s call for a national referendum on 1 November 2011, which drastically narrowed the French Presidency’s original Cannes Summit agenda and altered leaders’ priorities. The Greek/Eurozone debt crisis dominated Summit discussions, and was President Obama’s main priority at the Summit.
Rationale: "Pro-growth policies in the near term and meaningful deficit reduction in the medium term provide the best insurance policy to protect the U.S. recovery from global risks "
Outcome: The G20 Cannes Summit met the objective of laying the foundation for strong and balanced growth. Referenced as a key issue in the opening of the Summit’s final declaration, the G20 furthermore produced the "Cannes Action Plan for Growth and Jobs " to "address short-term vulnerabilities and strengthen medium-term foundations for growth." This Action Plan details a six-point strategy to strengthen the medium-term foundations for growth, including debt consolidation policies, structural adjustments and the rejection of protectionism. Summit documents reflect concentrated dedication to this issue, manifest in both the reaffirmation of previous Summit commitments to pro-growth policies as well as the articulation of new commitments and concrete measures to stimulate strong and balanced growth.
Rationale: "The EU is a critical anchor of global stability, and our single-largest trading partner. Fortunately, Europe has the resources and the capacity to overcome these risks. We’ll continue to support our European allies in their efforts to address this crisis, alongside the IMF and our G20 partners."
Outcome: Greek Prime Minister’s Papandreou’s call for a national referendum regarding the terms of the bail-out plan negotiated in Brussels on 26 October 2011 dominated as the key Summit issue for the G20 leaders. Despite uncertainty and speculation surrounding the status and prospects of the issue on the Summit’s first day (3 November 2011), the G20 resolved to ‘restore debt sustainability in Greece, strengthen European banks, build firewalls to avoid contagion, and lay the foundations for robust economic governance reform in the Euro area and call for their swift implementation.’ There exists, however, a fractured approach towards funding the bail-out plan, notably between the Eurozone’s preference of providing funds through the European Financial Stability Facility and other countries’ inclination to contribute vis-à-vis the IMF.
Rationale: "These efforts are critical to ensure international coherence and greater oversight of capital markets. "
Outcome: The final Summit declaration endorses "the IOSCO recommendations to improve regulation and supervision of commodity derivative markets " and furthermore stipulates that ‘all standardized over-the-counter derivatives contracts should be traded on exchanges or electronic trading platforms, where appropriate, and centrally cleared, by the end of 2012.’ The ‘Cannes Action Plan for Growth and Jobs’ furthermore articulates the G20’s commitment to the ‘full and timely implementation of the financial sector reform agenda agreed up through Seoul, including...clearing and trading obligations for OTC derivatives." Outcomes reflected in the Summit documents thus meet the objective of taking steps to standardize derivatives trades.
Rationale: "This builds on a host of initiatives to ensure the largest financial institutions bear their fair share of the burden and are discouraged from the risky behaviour that led to the crisis."
Outcome: The "Cannes Action Plan for Growth and Jobs" commits the G20 to ensuring that banks are adequately capitalized and have sufficient funding to deal with risks, and furthermore notes that "Central Banks continue to stand ready to provide liquidity to banks are required." The G20 final declaration re-affirmed member states’ commitment to fully implement the Basel III capital requirements by 1 January 2019, whilst respecting observation periods and review clauses, as a key means "to improve banks' resilience to financial and economic shocks." Governments in the Euro area furthermore agreed to increase the capital position of large banks to 9% of Core Tier 1 capital after accounting for sovereign exposures by the end of June 2012. The objective of increasing financial institutions’ capital buffers was thus met at the Cannes Summit.
1. Cannes Action Plan for Growth and Jobs, 4 November 2011. ↑↑
2. G20 Leaders Summit Communiqué, 4 November 2011. ↑↑
3. G20 Leaders Summit Communiqué, 4 November 2011. ↑↑
4. Cannes Action Plan for Growth and Jobs, 4 November 2011. ↑↑
5. Cannes Action Plan for Growth and Jobs, 4 November 2011. ↑↑
6. G20 Leaders Summit Communiqué, 4 November 2011. ↑↑
7. Cannes Action Plan for Growth and Jobs, 4 November 2011. ↑↑
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