Germany’s year-long presidency of the G20 ended on Thursday, and now, the office has been transferred to Argentina.
The twelve months at the helm of the world’s most important forum for international economic cooperation, were intense and successful. And the year’s challenges showed again the importance of international trust and cooperation. Not to forget continuity, as much of the work involved in international processes cannot be completed in a single year of presidency. That’s why it’s so important countries holding the presidency cooperate.
Once, the G20 dealt with macroeconomic stabilization and regulating the financial markets after the global financial crisis. Now, though, the agenda includes regulatory issues and long-term projects. One of Germany’s main priorities during its presidency was to make economies better able to handle crises. In the past year, finance ministers and central bank governors developed the G20 Hamburg “Resilience” action plan.
Now, together with the IMF, we agree that governments should take advantage of the strong global economy to ready themselves for possible future setbacks through structural reforms and debt reduction.
During its German G20 presidency, Germany also focused on cooperating more with Africa through its “Compact with Africa.” The initiative aims to improve investment opportunities in African countries by encouraging African governments to make reforms, and attracting potential investors. Ten African countries joined the initiative this year: Egypt, Ethiopia, Benin, Ivory Coast, Ghana, Guinea, Morocco, Rwanda, Senegal and Tunisia. The “Compact with Africa” also seeks to better network the other G20 members’ current initiatives to make them more effective.
Agreement was reached on improved regulation of the shadow-banking sector.
Involving the private sector is crucial for the Compact with Africa to work. So the finance ministry, the ministry for economic cooperation and the Bundesbank hosted a major international conference in Berlin in June 2017. And Germany, like other G20 members, is a committed bilateral partner with three Compact countries in particular: Ivory Coast, Ghana and Tunisia.
Thirdly, Germany put digital innovation in the financial sector on the agenda, to give more consumers and businesses access to financial services and discuss its impact on financial stability. This requires some knowledge about financial relationships so we also discussed education measures to improve financial literacy. Furthermore, Germany introduced a focus on cyber security in finance and made it clear that cyber-attacks are a major threat to the financial system, for individual participants and the stability of the whole system.
Beyond these three priorities, Germany also achieved results in key regulatory fields, from strengthening international architecture to the climate and taxation.
The G20 strengthened the international financial architecture and objectives for mobilizing private financing by multilateral development banks. Germany also built on the Chinese G20 presidency’s work optimizing the balance sheets of these banks and expanding their role in infrastructure investment. To increase debt sustainability in low-income countries, the G20 agreed on guidelines for sustainable financing. And we convened experts to review the governance of international financial structures and institutions, and present proposals for improvement.
We are consistently implementing our package of measures against the transfer of profits by international groups.
In financial market regulation, the focus was on implementation and evaluation, but agreement was also reached on improved regulation of the shadow banking sector. We are now in reach of finalizing the Basel III reform package. The G20 also made progress in curbing systemic risk among asset managers, transforming the shadow banking system and other issues.
We made advances assessing environmental and climate-related risks. We adopted a plan to solve problems with remittances from migrant workers which are far more important for the recipient countries than development aid. We also improved participation in and access to financial services, especially the G20 action plan on the financing of small and medium-sized enterprises.
All the G20 members agreed to continue the agenda on international taxation, and we made progress towards greater tax transparency. The first successful exchange of information on the common reporting standard took place during our presidency and is a milestone for international tax policy.
In addition, we are consistently implementing our package of measures against the transfer of profits by international groups, known as the BEPS project. We initiated a discussion on the fiscal challenges of the digital economy. And the G20 discussed further steps to combat tax evasion, terror funding, money laundering and corruption, as well as exchanging data about the true economic beneficiaries of offshore corporate structures. The G20 expressly supports efforts to comprehensively strengthen the Financial Action Task Force (FATF), which combats money laundering.
Germany is handing over the G20 presidency to Argentina today. We will play an active role in shaping a smooth transition and support the Argentinean G20 agenda in a spirit of continuity and close collegial cooperation. Germany received the same support from China in the transition from the Chinese to the German presidency. Such continuity and cross-presidency agendas are important to manage the challenges of the global economy. The G20 will continue to be a major player in the future when it comes to shaping globalization.
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