Asian, European Leaders To Vow To Work On Fiscal Rehabilitation

14 October 2014

Source: Bernama (Malaysia)
Source type: News Agency
Published on: 29 Sep 2010

BRUSSELS, Sept 29 (Bernama) -- Asian and European leaders gathering in the Belgian capital next month will pledge better coordination on reforms to prevent financial crises and maintain sustainable growth, a draft declaration to be adopted at the Asia-Europe Meeting showed Monday, Kyodo news agency reported. In the declaration on the global economic crisis, the leaders are also expected to note the importance of promoting international economic integration, with free-trade agreements between Asia and Europe in mind.

Japanese Prime Minister Naoto Kan will attend the summit meeting, which will draw representatives from 48 countries and organisations, including Japan, China, South Korea and members of the European Union.

Topics discussed at the meeting will also be on the agenda at the summit meeting of the Group of 20 advanced and emerging economies in Seoul in November and that of the Asia-Pacific Economic Cooperation forum in Yokohama later in the month.

In the draft, obtained by Kyodo News, the leaders declare that the economic crisis has exposed "weaknesses" in the global economic and financial system, saying that there is a connection between large fiscal deficits and the "continued fragility of the financial markets and uncertainty in the world economy."

Priority should be given to restoring market confidence, they say, urging Asian economies to make efforts to sustain a robust recovery and maintain growth momentum.

The leaders also pledge to strengthen "sources of growth" and say the economies concerned must work on reducing excessive public debts and global imbalances, citing the existence of countries with enormous trade surplus as an example.

The declaration expresses the leaders' resolve to conclude the Doha Round of global trade liberalisation talks under the framework of the World Trade Organisation, noting that its conclusion would be a powerful stimulus for sustained recovery on a global scale.

On International Monetary Fund (IMF) reforms, the leaders are expected to express their support for giving developing countries greater representation in the organisation given the greater weight they carry in the world economy today.

But discussions about it are expected to be postponed to a future general meeting of the IMF given a dispute between Europe and developing countries over the matter.

Europe is reluctant to see its representation weaken on the IMF's Executive Board, where it currently holds nine seats, including Switzerland, a non-EU member, if greater voting power is given to developing countries through the shifting of IMF quota shares.

The leaders also stress in the declaration the importance of stronger capital adequacy rules for banks and other financial reform measures aimed at preventing a global economic crisis.