G8 Business Summit / G20

09/27/2009

German business calls for worldwide comparable measures to reduce carbon emissions.

The BDI welcomes the G20's commitment to a coordinated strategy for sustainable growth to be monitored by the IMF. However, business warns against adopting an excessive and bureaucratic reporting and documentation system. It is important that concrete schedules be set up for the envisaged targets and measures for financial market reform.

The G20 states' commitment to introduce and apply the Basel capital requirements by 2011 at the latest has our full support. German industry has long been promoting this fundamental prerequisite for functioning global financial markets.

We welcome the commitment to adjusting capital requirements. A tightening of the required capital requirement for risky transactions is urgently required.

Care is required as regards the proposed additional leverage ratio: The German banking system's relatively low orientation to the capital market could result in competitive disadvantages for German banks in relation to the tightening of capital requirements. The resulting poorer credit conditions and more restrictive credit approval process would impose a burden on the real economy.

The tighter regulation of the OTC derivatives markets which has once again been confirmed is doubtlessly necessary and right in principle. However, in the implementation the G20 must act with care: Derivatives are indispensable instruments to safeguard companies operating at the international level of the real economy. Their use may not be jeopordised by more stringent regulation.

World Trade

It is to be welcomed that all those taking part in the summit have commited themselves to bring the WTO Round to a conclusion next year. This deadline may not again be allowed to pass without a result. The world economy urgently needs a fresh impetus.

What is missing in the joint summit declaration are concrete steps against growing protectionism. The barriers to trade and investment set up in recent months in the various G20 states must be dismantled immediately.

Charter for Sustainable Economic Activity

Federal Chancellor Merkel has had great success in that her proposal to set up a Charter for Sustainable Economic Activity has met with wide support. An interdependent world economy needs a common understanding as regards shaping the framework for sustainable activities. For the first time the major part of the community of states has agreed on common principles in the sense of a social market economy. The principles of free world trade, the promotion of competition, entrepreneurship as well as innovation and sustainablity agreed in Pittsburgh are right and important and must now be developed further.

Climate Protection

As a result of Pittsburgh the danger is growing that the World Climate Conference to be held in Copenhagen in December will not produce any results. The summit was not able to achieve any progress on the difficult issue of climate change. All hopes that the G20 could give a key impetus to the talks in terms of the Climate Conference in Copenhagen have been disappointed.

It has thus become even more doubtful whether it will be possible to achieve a substantial agreement in Copenhagen to succeed the Kyoto Protocol. Without an ambitious commitment to a long-term reduction target, the same competitive conditions for all countries and a strong impetus for investment in climate-friendly technologies worldwide, climate change cannot be mastered. It would now be important for the USA to give the talks a strong impetus as soon as possible. However, the emerging economies must also make a move.