Editor's note

In his introductory remarks, Commission’s President J.M. Barroso presented the “situational effect” of the global leaders’ decisions on the European economy. The main implications were summarized along three main directions: 

1. Along measures to guarantee the financial stability of the EU member states and those of the eurozone, mainly through stabilisation mechanisms and economic governance. The EU has taken decisive efforts on these lines with substantial contribution through fiscal stimulus during 2008-2010 and the needs to return to fiscal consolidation (as of 2011) in order to maintain confidence and growth. (Commission’s President, MEMO/10/277, Brussels, 27 June 2010).

For example, the President explained at the meetings the EU decisions towards stability of the European banking system through disclosure of banks' positions (so-called, stress tests), which was welcomed by all summit participants.

2. The EU took part in discussions on the Millennium Development Goals (MDG), where the importance of it was stressed in view of the UN High Level Conference on MDG in September.

The EU underlined the need for accountability if the world leaders want credibility; therefore at G-20 the accountability report as a very important step, was adopted.

3. The EU participated in an important decision at the G-8 meeting to speed up the pace towards achieving the MDGs on Maternal and Child Health. The European Commission is already very substantially engaged on these MDGs with $ 450 mln a year over the next 3 years (2011-13), which amounts to $ 1,35 bln. The EU has now topped this up with another $ 70 mln over 3 years. This brings the Commission's contribution to a total of $ 1,42 bln over 3 year (2011-12-13). In total, the EU-27 financing for these MDGs is about $ 4 bln.  

The EU is the global biggest donor providing 58 per cent of development aid worldwide (with € 49 bln per year (in 2009), or close to 100 Euro per European citizen.

At the G-20 summit in Canada, it was for the first time that the EU participated in the international economic cooperation as a “single legal entity” (according to the new Treaty.

The EU committed to the following main priorities:

·         striving for a coordinated approach at global level which combines growth-friendly fiscal consolidation followed up by the fiscal stimulus. Discussions in the G-8 have shown that it is possible to reconcile the conceptual differences. The EU expressed hope that it will be possible within the G-20 as well to agree on coordinated gradual and differentiated exit strategies, as well as on concrete, credible (though minimum) targets for deficit reduction and the stabilisation and reduction of debt.

·         the EU needs to keep the momentum in its action for financial repair and reform in order to stick to the agreed timeframe for reform, or even accelerate it. The EU wants to remind financial services in the region of what these services actually are: services for the benefit of European economies. Financial sector must be more resilient to crises and risk in order to avoid the situations when the taxpayers have to bail out the banks. Financial sector must make a fair and substantial contribution to the European development and continue its efforts on ways to make the financial sector an active participant in the costs of repair, resolution and prevention. With this in mind, the EU has agreed to set up a bank resolution framework, with an introduction of levies and taxes on financial institutions to ensure a fair burden sharing and providing incentives to contain systemic risks. As soon as other regions of the world did not share the same views, the EU most probably make one-sided initiatives, hoping that sooner or later similar approaches from other partners would follow.

·         the EU intends to strengthen the quality of bank capital and liquidity to face future difficulties. The EU welcomes and supports the progress made by the Basel committee and expressed confidence that the amount of the “reserved capital” would be significantly high and the quality of capital would significantly improve. The EU urged the G-20 to reach agreement at the time of the next Seoul summit on the new capital framework.

Common statement

Following the summit, the Commission President Barroso and European Council President Van Rompuy issued a statement on the outcomes of the G-20 Summit in Toronto (26-27 June 2010).

The statement contained recognition that the EU partners have agreed to concrete minimum targets for deficit reduction and the stabilisation and reduction of debt.

The EU's efforts in favour of stabilisation and growth were widely welcomed in Toronto.

On financial sector reform, the EU has worked hard ahead of the Summit to maintain the momentum.

In Toronto, the G-20 has responded with determination to keep the pace for making the financial sector more resilient to crises and risk. The agreed timeframe for reform was confirmed.

The EU came to Toronto with a European decision that the EU-27 would introduce systems of levies and taxes on financial institutions. Therefore, the EU welcomes the global community’s intention to make the financial sector participate in the costs of repair, resolution and prevention; it recognized the bank levy as a useful instrument. However, the mechanisms for financial sector’s involvement were left uncertain with more bilateral and sub-regional cooperation. 

During the discussions, the EU explained the recent European decisions on the stability of the regional banking system through disclosure of banks' positions (stress tests). Besides, the EU made a forceful plea for G-20 leaders to give new impulse for the Doha Development Agenda and to engage seriously in cooperation during the next months in order to reach in Seoul the final deal.

The EU acknowledged that trade is the most tax friendly and consumer friendly tool to generate growth, the path that all countries must constructively use. (European Council President’s MEMO/10/278, Brussels, 27 June 2010).