France and the International Monetary Fund will work together to develop criteria for the establishment of an international monetary mechanism to establish equity among currencies, and will have something tangible to present to the G-20 nations, and the rest of the world, next year, said French President Nicolas Sarkozy, in a press briefing at the close of the Seoul G-20 Summit.
France will host the 2011 G-20 Summit in Cannes in November.
The current imbalances in trade between nations with surpluses and nations running deficits, and the specter of currency wars and protectionism, as nations take measures to maintain their own systems, have drawn the most attention from the leaders of nations, businesses and NGOs participating in the conference.
The G-20 has not yet come up with concrete steps to solve these problems, but has agreed that the problems need to be solved, Sarkozy said.
One significant development is that China has agreed to host, next spring, the first meeting since Seoul on reforming the world's monetary system, Sarkozy told reporters. This fact, in itself, is a considerable step forward.
Sarkozy said that things are progressing, but there is an enormous amount yet to do. No sensible person could imagine that we can solve all the problems we face in but one year.
The G-20 has taken some steps to stabilize the global monetary system, through certain reforms to the IMF - enhancing the fund's ability to lend to nations with strong economic fundamentals, for example. Sarkozy said the IMF has been re-balanced and is better suited to pursue the reform of the global monetary system, which so needs to be reformed.
The world can no longer wait. This is a new world and it needs new ideas to protect its citizens, he said. We must pursue capitalism with a conscience.
Yes, it is complicated. Yes, it is difficult. But the legitimacy of the debate is no longer in dispute. We must improve our world's monetary order, Sarkozy said.
The French president said that the next G-20 should invite all countries that have something to say on the monetary issue to the next summit. He said all legitimate opinions and ideas should be entertained in the process of laying the foundation for the new monetary mechanism.
Once everyone is involved, it is hard for anyone to back out, he said.
That nations have been making moves on their own to foster their own systems is not surprising, Sarkozy said, because there is no multilateral monetary system they can adhere to.
Nations will have to decide to commit to reform when the reforms are presented, he said.
We cannot tell China or the United States what to do, Sarkozy said. But we have an agenda and we are going to move forward. I am going to use this opportunity to take reform as far as I can. The G-20 will lose credibility if we do not enact reform.