“Financial Security: China and the World” International Symposium

“Financial Security: China and the World”

Invited speech of  President Romano Prodi at the “Financial Security: China and the World” international symposium. Beijing 20-21 May 2011

Introduction

Highly Distinguished Guests,
Ladies and Gentlemen,

Never before has the financial sector played such an important role in the world economy as in the last few years. Financial markets triggered the economic crisis. Failure to reform them is endangering prospects for economic recovery. There is growing consensus that unless the international monetary and financial system is overhauled, long-term, stable development will be undermined.

A sound financial system is at the heart of any economic organization. As recent history has shown, turmoil in the financial world can cause prolonged, irreparable damage to the functioning of the real economy. Only a well-regulated global financial system will guarantee the future of each and every one of us. Yet it is all too evident that we are still a long way from achieving that goal.

Bretton Woods: a world long gone

At the root of this predicament is the global political situation. But to explain this we must take a quick step back in history.

The Bretton Woods Agreements that regulated the world economy for decades were possible because in 1944 the United States was the undisputed global power of the day. As a result, the international economic order was based on this unchallenged pillar. Everything worked fairly smoothly as long as the American economy dominated the world economic scene. Things started working less smoothly with the end of the immediate post-war period and the rise of other economic powerhouses. The new situation was apparent as early as 1971. With the end of the convertibility of the dollar. This signalled that the United States was no longer the world’s only economic pillar. After that, monetary and financial management became increasingly complex and is certainly no easier today in a period when the redistribution of economic power is now accompanied by progressive change in the balance of political power among players on the world political stage. The long transition from a monopolarism to multipolarism has certainly not increased the likelihood of reaching agreement on new global monetary and financial regulations.

Historically dominant countries – first among these, the United States – tend to slow down any process of change in order to preserve their privileges as holders of the world’s reserve currencies. Countries enjoying vigorous growth – like China – have the long-term objective of radically changing the system. They are fully aware, however, that achieving this takes time. They need time first and foremost to ensure that the new balance of power is both consolidated and perceived as definitive. And they need time to prepare their domestic market for the convertibility of their currency, and adapt their banking system to the prevailing international rules. Ascending countries have clear long-term objectives; they want to see a multi-player international monetary system. They know, however, that if they are to achieve a system that reflects the new world situation, their approach must be gradual and prudential. The goal is clear but achieving it requires a long-term strategy, not least because excessive haste could place harmful tensions on the world economy as a whole and slow their own development as a result.

The recent BRIC meeting on the island of Hainan was highly significant in this regard.

While participants reiterated their common interest in changing the balance of power also in the monetary and financial sphere, they were only able to take limited-scope decisions. They asserted the intention of making increasing use of their national currencies in trade relations with each other, and underlined their common will to reform the working of Special Drawing Rights. They also pledged to add other currencies to the four that make up the SDR basket and represent only the US, Europe and Japan. The meeting did not, however, produce more than this declaration of principle. This was firstly on account of the enormous technical problems that need to be solved and secondly, because the long term interests of the BRIC countries do not always coincide. We have started down the road of international monetary reform but the journey will be a long one.

When, at the height of the financial crisis, the G8 finally gave way to the G20, some believed that this would step up reform of the international monetary system. However, things turned out very differently from their initial promise. Reforming zeal has weakened with each successive meeting. Although this may be accounted for in part by the slowdown of the economic crisis, it is, however, also due to the objective differences among G20 members. The G20 agendas from the London to Pittsburgh summits through to the present day have gradually lost their punch and sense of urgency.

The Delicate Balance that is International Cooperation

We have had to admit how difficult it is to regulate international economic relations and build cooperation based on a future balance of power agreed by and favourable to all.

Nonetheless, the shift from the G8 to the G20 remains an event of fundamental importance. It marks an acknowledgement that no decision that will influence the future of our planet can be taken unless all the world’s major economic and political players are party to that decision. This, however, is not sufficient to usher in a new era of international cooperation, first of all because of the limits of the G20 organization itself, which lacks the stable, robust scaffolding required to carry out preparatory work. The G20 is still coming to terms with the idea that to be effective, complex multi-party international organizations must have a strong permanent secretariat to back them. As the scant results of the Nanking conference showed, this cannot be replaced by hurried preparatory meetings geared especially to the domestic political agenda of one member country. G20 action to instigate new international relations is further weakened by its slowness to acknowledge that we have entered a new era in relations between the different countries. The changes in the balance of power I mentioned before create a cacophony around the G20 table that makes any agreement on the reforms needed for the ordered development of the world in the future an arduous task. Even if considerable strides forward have been made on important technical issues – especially as a result of the work of the Financial Stability Board – there has, however, been very little change in the international monetary and financial system, because it is difficult – very difficult – to achieve harmonious regulation of the global economy in a world that remains politically fragmented.

Regulation is becoming increasingly difficult for the very reason that finance and the Economy are becoming more important in the political arena than military strength itself.
While the mere authority of one country (the United States) no longer holds, it is equally true that rules cannot be dictated by a two-way dialogue –between China and the United States. Today’s world can only be managed by a large number of players.

The Legacy of the Financial Crisis

Let us go back and examine the recent economic crisis.

In terms of magnitude and speed with which it spread, it was no less dramatic than the Wall Street Crash of 1929 that lasted many long years and led to the general impoverishment of the whole planet. While I do not want to dwell on the differences and similarities between the two crises, it must be said that because of past experience, governments today are better prepared to take remedial action.

The first big difference in the reaction to the crisis on the part of governments was not to succumb to the temptation to introduce protectionist trade measures, as happened in 1929. Governments everywhere understood how disastrous that would be for everyone and, despite strong calls to go in that direction, warded off attempts to dismantle the free flow of trade that contributed so much to the expansion of the world economy in previous years. This does not mean that further decisive steps need not be taken in this area, not least because the on-going changes in the political and economic balance of power make it difficult to see what future interests are at stake. For this reason, even if we have not fallen into the protectionist trap, the Doha Round dedicated to improving the rules governing international trade drags on without achieving any real results.

A further difference between this and the 1929 crisis is that the governments of the United States and China injected huge sums into the economic system. America’s eight hundred billion dollars and China’s five hundred and eighty-five prevented the world economy from going into a tailspin.

It should also be remembered that the crisis had its roots in the economic policies of the United States. Most important was the policy of low interest rates to facilitate home ownership and sustain the economy after the Internet speculative bubble and following 9/11. Secondly, there was ineffectual supervision of financial markets at the very time when these were quickly expanding in quality and quantity.

The Risks of Creative Finance

Deregulation effectively removed the protective barriers that appropriately separated investment banks from ordinary high-street lending institutions. At the same time, with interest rates being kept as low as feasible, surplus liquidity was created that constantly moved around in search of the highest earnings. This in turn created a series of speculative bubbles in diverse sectors: property, raw materials, equity markets and so on. In the wake of deregulation and low interest rates came financial innovation for which the classical economic-policy instruments of the past proved ineffectual. Indeed, financial innovation, which should have served to reduce investment risks and hence, encourage growth, caused the most devastating fall in confidence of past decades. Financial innovation in fact simply spread much of the risk onto unsuspecting investors.

World finance suffers from a deep-rooted contradiction: increasingly global in its reach, it is unable to give itself global rules. This has led to financial innovation taking ever-increasing risks only to offload them for the most part onto investors who are unable to assess what they are getting into.

Nor do I believe this is a thing of the past. In the last few months the large investment banks have resumed their old habits, which led to the crisis in the first place. The financial instruments have different names but the players are the same and their investments are similar in risk and opacity to the derivatives that fuelled the financial crisis. Decisive headway must be made on the regulation front, never forgetting, however, that the task is fraught with difficulties since diverse countries are competing fiercely with each other in order to achieve standards that do not put their own operators at a disadvantage.

We are not yet out of the “moral hazard” that characterised the behaviour of banks and financial institutions considered too big to fail.

And here I would like to stress another point. Creative finance that takes no account of any underlying social or economic situation does not just cause harm when something goes wrong. It is the source of continual market disruption, causing turbulence in the prices of raw materials, oil and food commodities.

When financial transactions exceed by ten or one hundred times the number of “real” operations, the result is permanent disequilibrium of prices that is deleterious to the Economy.

In a situation like this, it is statistically more likely that commodity-importer countries will be hardest hit.

The Contradiction between Global Markets and National Controls

Obviously, things cannot continue in this way for long. While globalisation is a boon, its excesses must be kept in check and the weaker players protected. Otherwise globalisation will be politically unsustainable on account of the risks it poses.

I am a profound believer in the market economy; but I also believe that the market works well only when checked by strict rules and controls. We cannot continue a contradictory system that operates across global markets with national rules and controls. Global markets require global rules.

One could counter by saying that in many countries supervisory bodies have grown and multiplied. There are regulatory bodies for banks, insurance companies, stock exchanges and so on. But these regulators, despite the repeated warnings of the Financial Stability Board, are clearly insufficient and in any case, prevalently national in their reach. This is in contradiction to the global economic context.

A common strategy cannot confine itself to a series of abstract rules but rather must:

a)    Set down agreed market control measures;
b)    Prevent deposit banks from taking speculative risks;
c)    Adopt transparency rules and fiscal instruments to limit the continued explosion of so-called “derivative” products;
d)    Set down mortgage loan rules in the property market;
e)    Impose strict professional conduct rules on rating agencies.

We are still far from achieving these results. Indeed we seem to be reluctant even to start down that road. The large investment banks are once again acting as before, confident they are too big to fail. Even the exorbitant earnings of their top executives have starting creeping up again as if the crisis and its root causes were a thing of the past. Only a short time after the worst financial crisis in the last 80 years, financial speculation is being resumed as strongly as ever. They’ve changed their name but not their spots! The lack of transparency and risk-taking is the same as for the worst speculative operations that led to the crisis. On the eve of the new G20, scheduled to discuss measures to curb excessive financial speculation, there is no agreement in the offing between those countries, like France, for example, which are calling for a tax on financial transactions, and those, like the US, that want stricter capital adequacy rules for financial institutions dealing with highly speculative instruments.

The Case of the Euro

Progress towards harmonisation and oversight of financial policies is proving extremely difficult even in a single currency area and largely for the same reasons. The case of Greece and other similar tensions in the Euro area are in fact a direct consequence of the fact that when the single currency was first established, the larger European countries refused to accept any form of European oversight on their national accounts. This mean that it was impossible to gain an understanding of the enormous overruns countries like Greece were amassing and the unsustainable burden taken on by others, like Ireland, to guarantee the indebtedness of their banking system. The concept of national sovereignty – still pretty much taboo – became a stumbling block preventing the smooth working of the economy for the reason that although many aspects of the markets are global, supervisory rules and systems remain strictly national. It would, however, be wrong to draw the conclusion that the Euro has no place among the key pillars of the world Economy.

The rumours and insinuations regarding its possible disappearance from the world economic stage do not take into account how things stand on the ground and that no European country, starting with Germany, has any interest in returning to a system of national currencies, which would be tantamount to splitting Europe into a strong north and a weak south. Certainly in Germany, as in many other European countries, there are strong populist calls for a return to old national values, which leads politicians to delay the necessary decisions or adopt them in a shroud of caution and hypocrisy. It is equally true that Germany’s hesitation, dictated by understandable electoral concerns, has only made the Greek crisis more difficult and complex. It is undeniable, however, that the economic and financial sector in Germany is fully aware that it is thanks to the Euro that Germany has been able to build a trade surplus which in percentage, is higher than China’s.

Before the birth of the Euro, Germany would never have been able to accumulate such a surplus because every time its trade balance showed signs of running a surplus, other European partners swiftly proceeded to devaluate their currencies. To give you an idea of how important this phenomenon is, let me just say that when I started my academic career – and it wasn’t centuries ago! – you needed 145 Italian lire to buy a German mark but when the exchange rate was fixed to enter the Euro, it was 990 lire to the mark. For years, devaluations of this kind prevented Germany from creating a surplus; very different from today when in the last 12 months alone, the country has created a foreign trade surplus of 200 billion Euros. And this will be one of the strengths of the German economic system, not just today, but also in the foreseeable future. So even in the event of serious political tensions, it is highly unlikely that any country would relinquish such an advantageous position. In addition, despite the arguments, the political debate and academic analyses into the Euro’s frail prospects, markets continue to sustain its value against the dollar.

It is also worth remembering that today the European economy leads the field in terms of GDP, industrial production and exports. So when people ask me about the pillars of the international monetary system ten years from now, I have no doubt in answering that the world economy will be based on a basket whose major currencies will in any case be the dollar, the Euro and the Yuan, even if most probably they will share that basket with other currencies.

Which and how many these currencies will be will depend on circumstances that are difficult to gauge today. Certainly, however, there will be many more voices heard around the G20 table, and finding a consensus will not be easy.

China’s Role and Responsibility

I have neither the authority nor the necessary competence to proffer any suggestions as to the road China may or should take to assume a growing and more concrete position of responsibility within the framework of the international financial and monetary system. This is the topic of ongoing debate within the country itself, in the most diverse academic settings throughout the world and among the world’s top financial and monetary institutions. Moreover, any decision in this sense will be closely linked to the general economic policy framework the Chinese government intends to implement in the future, especially in the light of the guidelines emerging from the XII 5-year plan approved by the National People’s Congress in March 2011. The problems of capital flow control and the workings of the banking system still have to be tackled in the light of the growing international responsibility China will have to assume in the near future. It will be the task of the government and the Chinese people to take the most appropriate decisions regarding wage levels, the balance between the different provinces, the building of the new Welfare State and the balance between savings, consumption and investments. As to what the international community expects from China, it is that China will cooperate actively in the area of international economic relations. This choice will also depend on the sustained growth objective China still needs to maintain in the long term to complete the great transformation started in 1978. Fostering active cooperation is a primary interest for China but also anecessary task vis-à-vis the whole international community. How to accomplish this function, whether with adjustments to the exchange rate, measures to increase domestic demand or with a mix of both, is the exclusive responsibility of the Chinese government.

In the long run, it is certainly a Chinese interest to have a transparent financial system with a free flow of capital in and out. And as a consequence of capital inability a flexible exchange rate.

Many years will be needed (we in Europe did in thirty years) but the opening of the banking and monetary system is indispensable. It is not necessary to do it immediately but to be persistent in this direction.

The direction is important. Non the speed.

The greatest concern today and certainly the greatest danger for the future of the Chinese economy is inflation.  For many years, China served the function of containing the prices of industrial goods on world markets both through national entrepreneurial initiatives and through multinational companies located in China.  In an initial phase, Chinese competition was founded especially on low wages. In recent years however, increases in productivity have sustained production costs or made them even more competitive despite the strong wage increases. Not to be forgotten either is the transfer of less specialized production to the poorer provinces and their replacement by high value-added and research activities in the most developed areas. This virtuous transformation might be threatened or even stopped by inflationary trends fuelled by a combination of increased international prices and increased domestic production costs. Even if technological innovations, especially in the alternative energy sector, succeed in alleviating the pressure on demand, China will always be a huge importer of food, energy and raw materials. No one can foresee with certainty how future price trends will develop, but all the elements we have today lead us to believe that this will be an upward trend, both on account of a larger world population but especially because of a strong growth in demand thanks to better standards of living enjoyed by hundreds of millions of people in many countries around the world.

Over and above the particular domestic real estate situation in China, there are risks that prices will increase in those sectors where rising international prices are not easily offset by growth in domestic productivity. The greatest risks are obviously in the food and transport sectors, where the most affected will be lower income populations. Failure to keep inflation under control would naturally force the introduction of adjustment measures, with consequences that would severely affect not only China but also the entire world economy. We should not forget that it was only dynamic growth in China and other developing countries that prevented the financial crisis from turning into a global tragedy and the world economy from stagnating for many more years than it did.

The Growing Interdependence of the Global Economy

The picture I have perhaps too hurriedly sketched out leads us nonetheless to the undeniable conclusion that the most salient feature of the world economy is its interdependence. Just think for a minute of another recent fact, the negative outlook issued by Standard & Poor’s on the American sovereign debt. In theory, this announcement should have been of concern to the United States alone. In fact, it caused anxiety throughout the world, starting with China, which holds a conspicuous slice of the American public debt. We live in a world full of contradictions. In the popular imagination, China on the one hand, and the United States – and Europe – on the other, have opposing interests. But then it becomes evident that any inflation in China would be very detrimental to Western economies and any increase in the American debt risk is viewed with terror by institutional investors, including the Chinese government. We should also reflect on the fact that the largest energy importers in the world – which include China, the United States and Europe – would have every interest to cooperate when it comes to deciding on supply security issues. I could continue to give examples in many other fields before coming to the general conclusion that economic and financial security has to involve convergent strategies agreed on by the world’s major economic players.

Building a Multilateral Future

Building convergent strategies at a time when power has become fragmented is an extremely difficult task. This is because a system of scattered power does not just involve relations between sovereign states but also with industrial enterprises, banking and financial organisations, pressure groups and NGOs, all of which, albeit to a lesser degree than the power wielded by states, are having an increasing impact on world political decisions. With so many players, it is becoming increasingly difficult to run institutions and construct adequate collective responses.

This assertion is certainly a valid general statement. But if we confine ourselves to the economic and financial relations among states, it is obvious that regulating surpluses, deficits and imbalances requires not a bilateral but a strongly multilateral approach, one that rests on the pro-active role of the large supranational institutions like the United Nations, the International Monetary Fund, the WTO and all the other organisations that arbitrate between the different countries. So tackling the world’s financial problems within a wider framework than the existing political context is a must.

At this point we are faced with the difficulties I outlined at the start of this talk when I said, that in this transitional phase, players believe they can achieve results that best serve their interest delaying the agreements in the longest possible timeframe.

My final message is that this approach is deeply flawed. A global agreement is indispensable if we want to surmount the crisis and if we want to go down the road towards harmonious development of the world economy. A multi-polar world is a world based on mutual interdependence.

Former Italian PM says new development agenda needed for G-20

Interview by Marzia De Giuli to Romano Prodi on Xinhua 2010-11-11 23:33:31

MILAN, Italy, Nov. 11 (Xinhua) — A new agenda for development issues worldwide is badly needed for the G-20, says former Italian Prime Minister Romano Prodi.

Prodi said in an interview with Xinhua on Wednesday that it has become evident over the past several years that the world needs a wider representative than the G-7 or G-8.

“In my life, I have participated in 10 G-7 and G-8 summits, five of which in quality of president of the European Commission, witnessing year after year how that assembly was insufficient to interpret the big problems of the world,” he said on the eve of a two-day G-20 summit in Seoul.

“The G-20 can and must be the solution, but it still lacks the technical, preparatory and organizational structures necessary to play its role,” the former prime minister said.

In Prodi’s view, the global financial crisis has accelerated the shift from G-8 to G-20 in a sense, but the global financial crisis has also accentuated divisions between different players.

Speaking of the G-20 summit in Seoul, Prodi said, he doesn’t expect any agreement to be reached, but he wishes dossiers and problems are “put into line” in order to set a road map for the negotiations aimed at delineating a new asset of the international financial and monetary system.

“Of course this process needs time due to the growing complexity of the global scene, and all steps forward will need to be done calmly,” he said.

“We need to remember that all previous monetary agreements, Bretton Woods included, had been preceded by years of conferences and long technical preparation despite the global asset being much simpler at that time,” he noted.

He said it is clear that the monetary scenario, with the euro and dollar side by side, doesn’t reflect the globalized world anymore.

“Today nothing is possible without considering the growing active role of the world new protagonists, such as China,” he said.

Prodi said moving from one monetary system to another and ordering a globalization in such a rapid and tumultuous way are two tasks that need “magnanimity and time” since adaption in worldwide change processes are always slow and difficult for all the players.

“Therefore, I am not surprised at all of the tension between China and the United States, which are natural parts of the change process,” he said. “Neither am I worried about the momentary scarcity of results, as I trust the wisdom of leaders in charge of taking important decisions.”

Prodi said he never lined up with those saying that the world is already out of the economic crisis. “Rather I say it’s like being on the right way after a big disease which needs a long
convalescence,” he said.

Prodi defined Europe as “one of the big hopes in the world, indispensable for the balancing of future international relations.”

Prodi, also a member of the Chinese Academy of Governance, said if Europe cultivated a bilateral relationship with China rather than relating through its single countries, it would be better for both “in terms of quality and quantity, considering Europe’s world leading GDP, industrial production and exports.”

The former prime minister said the continent’s fragmentation still prevails, as proved by the Greek financial crisis that he said transformed a small problem into a big one due to the lack of a joint action.

He said some steps had been taken but Europe’s role in the G-20 won’t be strong if the continent’s single countries keep adopting diverse tactical strategies.

For example, he said, Italy hasn’t realized yet that it urgently needs a big change from the inside in order to become the object of foreign investments and understand the “fermentation brought by globalization.”

“From one side, closing the door to ongoing change processes is unthinkable, but from the other, Italians need first to become aware of this processes in order to adopt the consequent measures,” he said.

(ANSA) – ROMA, 9 NOV – Romano Prodi, Jacques Chirac e Jean Chretien smentiscono ad una voce, in una dichiarazione all’ANSA, l’affermazione di George W. Bush, nel suo libro di memorie, circa la loro netta contrarieta’, nel 2002, alla costituzione di uno Stato Palestinese.

‘Se e’ confermato cio’ che scrivono oggi le agenzie’, dice l’ex presidente della Commissione europea, che ha parlato al telefono sia l’ex presidente francese che l’ex primo ministro del Canada, ’si tratta di una ricostruzione non vera. Anzi, smentiamo che da parte nostra vi fosse alcuna opposizione alla nascita di uno Stato Palestinese’.

Nel libro, secondo le anticipazioni, Bush sostiene di aver avuto, tra i leader mondiali, l’appoggio immediato dell’allora premier britannico Tony Blair al vertice G8 di Kananaskis in Canada, mentre ‘altri erano meno entusiasti. Jacques Chirac, il presidente della Commissione europea Romano Prodi e il premier canadese Jean Chretien – scrive in particolare l’ex presidente Usa – erano chiaramente contrari’.

Data: Martedì 9 novembre 2010, 22:22

I leaders del G20 ieri a Toronto

Articolo di Romano Prodi su Il Messaggero del 27 Giugno 2010

La lenta agonia del G8 prosegue il suo corso, anche se nessuno è ancora in grado di verificarne la morte cerebrale. Perché la sua fine non facesse troppo rumore è stato per ora affiancato al G20, che progressivamente ne prenderà il posto senza pianti e senza rimpianti. Il G8 ormai da qualche tempo rappresentava una realtà mondiale sorpassata e la riunione di ieri lo ha semplicemente confermato. Sono stati passati in rassegna tutti i principali aspetti della politica internazionale (dall’Afghanistan, all’Iran, dal terrorismo internazionale al narcotraffico) senza tuttavia alcuna sostanziosa nuova deliberazione in materia.

L’unica cosa importante è l’impegno di mettere a disposizione la cospicua somma di 7,3 miliardi di dollari per la salute delle madri e dei bambini nei Paesi più poveri del pianeta, anche se debbo prendere questa bella decisione con un pizzico di prudenza perché non sarebbe la prima volta che i Paesi del G8 si impegnano ad assegnare ai Paesi più poveri risorse che non vengono poi versate ma restano solo una promessa. Non parliamo poi dell’efficacia concreta dei generici impegni per un approccio globale nella lotta contro la fame nel mondo. Quasi mai i fatti hanno avuto la stessa dimensione delle parole.

Ho partecipato a troppi G8 nella mia vita (cinque come presidente del Consiglio dei Ministri della Repubblica Italiana e cinque come presidente della Commissione Europea) per non essermi reso conto della caduta di rappresentatività dei G8 in un mondo che cambia e in cui i nuovi attori della politica e dell’economia mondiale, tenuti fuori da tale consesso, non possono essere più esclusi dalle grandi decisioni che riguardano il futuro del mondo.

Celebrata l’estrema unzione del G8 è successivamente iniziato il G20, nel cui campo giocano sostanzialmente tutti i protagonisti della politica mondiale che dovranno essere in futuro il punto di riferimento delle grandi decisioni planetarie, ma che oggi potranno concludere ben poco per la mancanza di accordo sul principale tema che è sul tavolo e cioè la strategia di uscita dalla crisi.

Il presidente americano Obama ha infatti, a questo proposito, chiesto ripetutamente ai due Paesi che sono fortemente in attivo nei saldi del commercio mondiale di riequilibrare la propria posizione, rendendo in tal modo più facile l’aggiustamento di coloro che, a partire dagli Stati Uniti, sono invece in cronico passivo. Alla Cina Obama ha chiesto la flessibilità del cambio dello yuan, mentre ha fatto pressione sulla Germania perché aiutasse la ripresa adottando una politica di minore austerità fiscale.

La risposta positiva cinese è stata già data in anticipo con la disponibilità verso una maggiore flessibilità della valuta nazionale.

È un impegno importante ma che lascia alla Cina un grande margine discrezionale sui tempi e sui modi di attuazione di un’eventuale rivalutazione.

La Germania ha invece risposto picche ed ha varato invece un piano di austerità, non certo utile per la ripresa europea (che poneva le proprie speranze sulla crescita della domanda interna tedesca) ma sicuramente popolare presso gli elettori tedeschi, convinti che la crisi debba in ogni caso essere combattuta con l’austerità, anche se le ricette per la guarigione non possono essere le stesse quando le malattie sono diverse.

Nessuna proposta comune, quindi, per accelerare la ripresa dell’economia, anche se non noi europei non possiamo muovere alcun rimprovero agli altri perché, nonostante il legame che ci unisce, non siamo stati in grado di disegnare un percorso comune di uscita dalla crisi. Non mi dolgo invece riguardo al mancato accordo su una tassa sulle banche. Capisco che essa sarebbe stata molto popolare, ma sarebbe anche stata quantomeno una ragione per rendere più caro il credito, scaricando sui clienti il peso della tassa stessa proprio in un momento in cui molte aziende sono affamate di credito semplicemente per sopravvivere.

Se non succedono miracoli sarà quindi un G20 particolarmente magro e magri saranno anche i prossimi, se non ci affrettiamo a dotarli di strutture forti e permanenti, in grado di elaborare le proposte con largo anticipo e di arrivare all’approvazione finale dopo discussioni approfondite ed esaurienti. Questi vertici, con protagonisti numerosi e con calendari serrati e predeterminati, possono arrivare ad importanti decisioni solo se il menu è quasi pronto prima dell’inizio della riunione. Mi sembra che, stavolta, il menu fosse scritto solo sulla carta e che in cucina non ci fosse nessuno chef in grado di coordinare il lavoro dei cuochi e che ognuno badasse solo alla sua pentola. Se il G8 sta passando a miglior vita per la insufficiente rappresentatività dei suoi protagonisti, non vorrei che il G20 entri in una crisi irreversibile perché gli attori non sono in grado di lavorare insieme.

Evidentemente spera di poter dimostrare che siamo tutti eguali’. Ma poiche’ non e’ cosi’, ho dato mandato ai miei avvocati di adire alle vie legali”.

Se sI guarda alle decisioni concrete e immediate del vertice dei G20 di Pittsburgh non escono grandi novità.

E grandi novità non potevano esserci perché il futuro economico è ancora troppo incerto. Tutti sono infatti d’accordo che il punto più basso della crisi è passato, ma le incertezze su quando e come ci sarà una ripresa duratura e solida hanno ovviamente impedito l’adozione di una nuova strategia comune.

In poche parole l’orizzonte non è ancora chiaro per permettere di prendere le misure capaci di mettere in un equilibrio più stabile i diversi sistemi economici mondiali e costruire una strategia di sviluppo di lungo periodo. E, soprattutto, per diminuire il peso e il rischio dei grandi indebitamenti che i diversi Paesi hanno dovuto accumulare per far fronte alla crisi.

Il comunicato finale di Pittsburgh è perciò pieno di belle parole e di ottime intenzioni, ma nulla si propone riguardo al grande squilibrio commerciale tra Usa e Cina e ben poco riguardo alle riforme del sistema finanziario internazionale.

Eppure, analizzando lo svolgimento del vertice, vi sono parecchie importanti osservazioni da fare.

In primo luogo il G20 ha svuotato il G8. Era logico che questo avvenisse perché bisognava rendersi conto che il mondo era cambiato, ma non può non destare sorpresa il linguaggio diretto e quasi brutale della dichiarazione ufficiale del Governo americano in cui si scrive che i leader presenti «hanno messo il G20 al centro del loro disegno per costruire uno sviluppo duraturo ed evitare le debolezze finanziarie che hanno portato alla crisi».

La fine del G8 non poteva essere annunciata in modo più secco, dato che ad esso vengono ora riservate soltanto le materie riguardanti la politica estera e le relazioni internazionali, materie che il G8, già da molti anni, si è dimostrato incapace di trattare.

A Pittsburgh si è celebrato il trionfo dei 20 grandi tra cui ben cinque Paesi asiatici con l’aggiunta di altre nuove inclusioni come l’Australia, l’Argentina e la Turchia, ma l’elevato numero dei Paesi partecipanti e le modalità di svolgimento di questo vertice hanno già reso evidente che le decisioni verranno in pratica prese da un gruppo ben più ristretto di Paesi.

E se analizziamo anche solo la dimensione e la qualità delle delegazioni presenti, gli Stati Uniti e la Cina hanno già assunto un ruolo di preminenza.

Il così detto G2, (cioè Stati Uniti più Cina), che ritenevo una ipotesi di un lontano futuro, appare meno lontano e fantasioso del previsto anche perché a questo accordo è sempre più condizionato il successo del prossimo vertice mondiale sull’ambiente che si terrà tra poche settimane a Copenaghen.

In questo direttivo mondiale in formazione l’Europa appare sempre più debole e marginale. Nicolas Sarkozy e Gordon Brown si sono presentati sul podio assieme ad Obama ma appaiono sempre più come un contorno quasi ornamentale di fronte alla forza del presidente americano, mentre anche la Germania, opacizzata dall’imminenza elettorale, si è limitata ad un semplice ruolo di appoggio.

Nel G20 i Paesi europei rimangono tanti ma, divisi, non sono in grado di giocare alcun ruolo, pur contando sulla presenza aggiuntiva di Spagna ed Olanda come Paesi osservatori.

L’Europa o è unita o non esiste ed è perciò quasi naturale che anche nel quadro del necessario aggiornamento del Fondo Monetario Internazionale, siano prevalentemente i Paesi europei a dover cedere parte delle loro quote ai nuovi protagonisti dell’economia mondiale. E questo proprio in un periodo in cui l’euro si va sempre più rafforzando.

Un altro importante messaggio che ci è arrivato da Pittsburgh riguarda la diffusa preoccupazione per il continuo aumento della disoccupazione. Essa è la più grave minaccia alla pace sociale e al futuro delle nostre economie, ma debbo ammettere che ho trovato un poco farisaico che ci si sia quasi stupiti del cattivo andamento del mercato del lavoro. Tutti gli studiosi di cicli economici sanno infatti che l’occupazione comincia a ripartire almeno un paio di trimestri dopo l’inizio di una solida ripresa. Dobbiamo quindi lavorare ancora per adottare interventi e sussidi aggiuntivi in grado di fare fronte ad una tragedia che sarà più severa nel corso dei prossimi mesi.

Quanto alle riforme del sistema monetario internazionale, esse sono state ovviamente e direi saggiamente rinviate a quando il quadro di riferimento sarà più chiaro. Per ora ci si è accontentati di proporre una tenue regolamentazione ai “bonus” dei banchieri, placando in tal modo, anche se parzialmente, le ire popolari nei confronti di coloro che sono da molti ritenuti i principali responsabili della crisi.

Anche se i giudizi sintetici sono sempre imperfetti, mi sembra di poter concludere che a Pittsburgh abbiamo assistito, come spesso accade nella storia, ad un vertice che ha deciso ben poco di concreto, ma che ha registrato un mutamento radicale nei rapporti di forza della politica mondiale.

An UN peacekeeper in Darfur

Africa at UN.

Versione italiana

Sept 23rd 2009.

The African Problem will be at center stage when today, September 23rd, the UN Security Council, chaired by President Barack Obama, will meet with the ten major contributors of human resources to the UN peace keeping operations, to discuss the issue of peace keeping in the world.

African wars in fact take up over 70% of all the resources dedicated by the United Nations to Peace Keeping operations and there has been no peace for decades in many parts of  the continent. From the Horn to the Great Lakes to West Africa conflict is endemic. The cost is staggering. Millions of people have been killed  billions of dollars that have been spent. Associated problems such as poor infrastructure, environmental threats, displacement, diseases, mean that the aftermath of conflict is more damaging and long lasting than the conflict itself. Though military capability may be part of any potential solution, peace on the African continent cannot be achieved only through the deployment of military forces. Measures such as early warning, conflict prevention, conflict resolution and post-conflict reconstruction should be part of Peacekeeping Capacity.

The UN Security Council surely has full responsibility for keeping peace and security, and UN peacekeeping has undergone an exponential increase since the early 1990s.

However it is becoming more and more clear that these crucial objectives cannot be achieved without a much deeper involvement of African Institutions, such as the African Union and the Regional Organisations which can take care of wars spreading beyond national borders which have been drawn with no care for tribal, ethnical or religious realities.

A significant amount of synergy to be achieved by drawing on the respective capacities of these organisations, but  the African Union has recognised the need to develop its own capacity to respond to crises on the continent.

I believe it is extremely important to create the conditions for increasing the participation of the AU in the decision making process and execution of peace operations on the African continent and to bolster through financing it a ‘peacekeeping capacity’ so to  transfer, eventually ,  responsibility and ownership of the operations to AU.

But, up to now, important countries such as France and UK have opposed  the empowerment of the African Union to take care of African Peace. 

The assumption is that the Africans have not the capacity to do it and, throwing money to the problem, would not help to solve it. 

This is right , in principle, but does not consider that without doing something concrete, visible and with a long term perspective, we end up in the ‘chicken or egg syndrome’ and nothing will ever change.

But something new is coming.

The panel I chaired on Peace Keeping in Africa proposed, among other recommendations, a ‘Long Term Multidonor Trust Fund’, specifically designed for  African Union Capacity Building.

The report of the United Nations Secretary General to be released the 23rd  emphasizes the relevance of a strong strategic partnership between AU and UN.

It is very likely that President Obama will support these steps and as he said in his recent speeches on Africa, he will be strongly against policies which might even bring to memory some colonial culture. Policies which not only are very dangerous  for peace in Africa, but have effect going well beyond the issue of peace keeping . 

The same who oppose the idea of a strong AU are those who privilege bilateral relations with those African countries where old ties exist. This bilateralism is preventing the creation of markets large enough to foster a significant economic growth. The internal trade in Africa is very low and projects for infrastructures at the continental level for transportation, energy and communication are totally insufficient. Also China, which is present in Africa all over, following a well visible continental policy, deals with the African Countries one by one and does not help their integration in a larger reality.

Rather then blaming the Chinese for their ‘exploitation’ of natural resources we should try to find with them a common policy toward the continent, aiming to a strengthening of the role and of the power of the African Union and to define long term strategies at the continental level, respectful of all the local ethnical, religious and tribal realities.

Economic support and assistance to those who are more in need are surely very important, but from peace keeping to diffusion of democracy and economic development a new integrated African Policy is badly and urgently needed.

Romano Prodi

Chairman of the UN-AU Panel for Peacekeeping in Africa

Former President of the European Commission and Italian Prime Minister

L'incontro con Vladimir Putin

PRODI PROF ONORARIO A MOSCA, SOGNO ITALIA RECUPERI PRESTIGIO 
 
LA CERIMONIA ALLA MIRBIS, GLI ANEDDOTI E L’INCONTRO CON PUTIN

(di Claudio Salvalaggio) (ANSA) – MOSCA, 16 SET – Non ha ‘rimpianti’ o  ‘ambizioni politiche’, ma ha ancora un ’sogno’ Romano Prodi, ‘che Italia recuperi il ruolo che deve avere nel mondo’, che ‘torni la vecchia simpatia e fiducia che c’e’ sempre stata per il nostro Paese’. Parla senza nominare mai il governo Berlusconi, benche’ i cronisti lo incalzino, mentre e’ ancora in toga dopo la cerimonia per la sua nomina a professore onorario della Mirbis, una prestigiosa business school internazionale di Mosca, la prima nata nell’Urss all’ombra della perestroika.

Ora ha 400 partner di 47 Paesi e 5mila studenti, dopo aver sfornato  finora 27mila specialisti. Prodi ne e’ considerato il padre, dato che contribui’ a fondarla come presidente della societa’ di ricerca Nomisma, ed oggi ha raccolto gli onori concludendo la sua visita in Russia di tre giorni, tra aneddoti d’epoca, una lezione sulla crisi e un commento sul suo incontro ieri con il premier Vladimir Putin.

‘Mi ricordo quando nel 1988 parlai della scuola a Gorbaciov e mi chiese di illustrargli la differenza tra capitalismo ed economia collettiva’,  ha esordito Prodi davanti al corpo accademico, agli studenti, alla
moglie Flavia e all’ambasciatore italiano a Mosca Vittorio Surdo.

Conoscendo la caccia come in genere tutti i russi, gli chiesi perche’ a suo avviso il cane, pur correndo piu’ veloce della lepre, non riesce mai a raggiungerla: gli spiegai che il cane lavora sotto padrone mentre la lepre lavora in proprio’, ha raccontato, riferendo di un Gorbaciov intenzionato a citare l’esempio al Soviet supremo. Lo stesso Gorbaciov che,al drammatico tramonto del presidente Boris Ieltsin nel 1999, lo chiamo’ al telefono quando era a capo della Commissione europea e gli raccomando’ l’oscuro e giovane Putin assicurandogli che ‘era l’unico in grado di risollevare le sorti della Russia’.

Putin l’ha ricevuto ieri alla Casa Bianca, sede del governo russo, per un ‘lungo e disteso’ incontro di circa un’ora.

‘Appena ci siamo visti abbiamo detto entrambi ‘non si parla di Italia”, ha garantito oggi Prodi ai cronisti. Nella sua agenda con il premier russo, ha rivelato, c’erano invece l’Africa di cui si occupa per conto dell’Onu, le relazioni Ue-Russia, la crisi internazionale e la situazione economica russa con le strategie del governo in materia.

L’ex capo della commissione europea ha criticato i rapporti a corrente alternata tra Bruxelles e Mosca: ‘E’ assurdo che questi rapporti siano un giorno buoni, un giorno cattivi, non e’ questo il modo di operare tra realta’ politiche che hanno molto in comune e debbono pensare a strategie di ampio respiro’, ha osservato Prodi, che da presidente della Commissione Ue aveva favorito l’avvicinamento tra Europa e Russia, tanto da fargli evocare il binomio ‘vodka e caviale’. A suo avviso esiste una complementarieta’ di interessi che riguarda anche l’energia, settore nel quale Bruxelles dovrebbe avere una sua politica.

Quanto al futuro, Prodi e’ tornato ad escludere un suo ritorno alla politica come alla maratona: ‘Entrambe mi sono impedite da una sciatica psicologica o reale’. ‘Ho fatto tante cose, sono stato presidente della Commissione europea e due volte presidente del Consiglio, quando il gioco e’ finito e’ finito’, ha aggiunto, dicendosi appagato della sua nuova vita di conferenziere internazionale, del suo incarico Onu per l’Africa e delle sue docenze universitarie, una gia’ in corso negli Usa alla blasonata Brown university e l’altra alla Business School di Shangai dal prossimo febbraio.

‘Se uno fosse interessato alla politica italiana – ha sottolineato – se ne starebbe in Italia e parteciperebbe al dibattito politico, in particolare a quello del Partito democratico, cosa che non faccio’.

Oggi e’ tornato in cattedra alla Mirbis, con una lezione sulla genesi della crisi, sulle misure che il prossimo G20 deve prendere ‘per evitarne un’altra tra 15-20 anni’, sul ruolo dello Stato ‘leggero’ ma ‘arbitro’ e ‘regolatore’ del mercato anche attraverso la leva fiscale, per evitare disuguaglianze sociali come l’attuale rapporto di 500 a uno nei redditi tra i piu’ ricchi e i piu’ poveri.

(ANSA).

$ vs. €

La sfida di una moneta unica mondiale

Articolo di Romano Prodi su Il Messaggero del 16 Luglio 2009

Negli anni nei quali in Europa si stava costruendo l’Euro, gli incontri bilaterali che ogni anno avevano luogo fra l’Unione Europea e la Cina si svolgevano in un modo abbastanza particolare.
Nella prima parte della riunione veniva sbrigata con una certa rapidità l’agenda programmata. In seguito il Presidente Jang Zemin iniziava un analitico bombardamento di domande molto semplici e dirette.

Chiedeva se davvero sarebbero scomparse le vecchie monete nazionali come il marco tedesco o il franco francese (nulla mi domandò riguardo alla lira) e poi se sarebbe stata creata una carta moneta comune e, infine se, a mio parere, sarebbe stato opportuno per la Cina immettere l’Euro fra le riserve monetarie del Paese

La mia risposta a tutte queste domande era evidentemente positiva e cercava anche di essere rassicurante nelle motivazioni.

L’Euro divenne poi una realtà e, come sappiamo, nei primi mesi di vita il suo valore si indebolì fortemente nei confronti del dollaro, provocandomi una certa preoccupazione riguardo alla validità dei pareri che mi ero permesso di esprimere in precedenza.

Nell’incontro successivo fui tuttavia rapidamente tranquillizzato dallo stesso presidente che mi disse che la Cina era ancora interessata a comprare Euro sia perché il suo valore sarebbe aumentato (e ci prese in pieno) sia soprattutto perché la Cina desiderava vivere in un mondo in cui non vi fosse uno solo al comando e che un maggiore equilibrio fra le monete di riferimento avrebbe costituito un ulteriore passo per ottenere questo risultato. E che quindi era un obiettivo di lungo periodo della Cina avere in portafoglio Euro e dollari in misura tra di loro paragonabile.

Una visione chiara e lucida di come gli aspetti economici, politici e monetari sono profondamente legati fra di loro. Per quanto mi posso ricordare nessun riferimento fu fatto allora ad un potenziale ruolo della moneta cinese in questo nuovo ordine mondiale.

Sono passati poco più di cinque anni e il governatore della banca centrale cinese Zhou, in occasione del G20 e poi del G8, ha proposto la costituzione di una “valuta globale” di riserva per sostituire il dollaro come valore di riferimento degli scambi mondiali.

Non un semplice affiancamento dell’Euro al dollaro ma un quadro in cui i nuovi rapporti di forza si esprimano anche nel campo monetario ed includano perciò i nuovi protagonisti della vita economica mondiale a partire dalla Cina.

Pur sapendo tutti quante volte (a partire da Keynes nel lontano 1944) questa proposta sia stata ripetuta e pur conoscendo bene quali difficoltà si frappongano e quanto sia lontano questo obiettivo, non possiamo tuttavia esimerci da due riflessioni.

La prima riguarda l’indebolimento della leadership americana in un così breve spazio di tempo.
Gli Stati Uniti restano di gran lunga il più potente Paese del mondo. Tuttavia l’errore politico della guerra in Iraq, la debolezza della bilancia commerciale e la quantità di dollari giacenti nei forzieri delle banche centrali degli altri Paesi hanno reso molto più complesso e difficile l’esercizio di questo potere. Gli Stati Uniti non possono cioè esercitarlo da soli sia nel campo della forza militare che della moneta.

Ci vorrà ancora tempo perché si possa parlare di unica moneta di riferimento mondiale ma il problema è ormai sul tavolo e, se i nuovi membri del G20 faranno fronte comune, le loro richieste non potranno essere per sempre ignorate. Perché il mondo è veramente cambiato.

La seconda riflessione riguarda l’Euro. Questa moneta è una grande positiva realtà che, nella presente crisi, ha salvato l’Europa da disastrose svalutazioni competitive. L’Euro, tuttavia, costituisce solo il 26% delle riserve monetarie mondiali, che sono ancora per il 65% basate in dollari e la Cina stessa, nonostante il suo obiettivo politico di diversificare le proprie riserve, ha continuato a comprare soprattutto buoni del tesoro americani. E le transazioni internazionali, nonostante ripetuti annunci e ripetute minacce e nonostante la grande forza dell’economia della zona Euro, continuano a svolgersi in dollari.

La spiegazione è semplice: perché una moneta possa affermarsi come punto di riferimento nel mondo non basta la forza economica rappresentata dalla moneta stessa. Occorre una forza politica che guidi le grandi scelte che dalla moneta verranno sostenute e rafforzate. Un’unione monetaria non sorretta da una comune politica economica non può essere un punto di riferimento per l’economia mondiale.
Se questa è la situazione credo che sia interesse dell’Unione Europea appoggiare apertamente i tentativi in corso per arrivare alla costruzione di una moneta unica mondiale.

Ci vorrà un enorme lavoro e tantissimo tempo ma sarà un altro passo in avanti per rendere meno probabili le ricorrenti crisi dell’economia mondiale.

      Roma, 13 lug. – (Adnkronos) – 20 miliardi di dollari sono il minimo del minimo. E’ questo il giudizio dell’ex-premier Romano Prodi sugli aiuti per la cooperazione e lo sviluppo dell’Africa decisi nel corso del G8 de L’Aquila. In un’intervista con il giornalista di Umberto Martini, in onda stasera alle 23.00, su Rainews 24, nella sede di Bologna della sua Fondazione per la Collaborazione tra i Popoli,
Prodi ha detto precisato che oramai il G8 ha perso la capacita’ di intervenire concretamente per risolvere i problemi dei paesi poveri.

C’e’ bisogno di una politica nuova, che cointribuisca allo sviluppo di una forte Unione Africana sul modello della nostra Unione Europea.

E’ necessario – ha proseguito Prodi – che l’Unione Africana sia messa nelle condizioni di agire in autonomia per creare una politica comune di tutti i paesi africani sotto la tutela delle Nazioni Unite.
Ma questo progetto non e’ condiviso da alcuni Stati occidentali.  L’Italia dal punto di vista politico, manca di una visione dell’Africa. Non c’e’ attenzione da parte della nostra classe dirigente che e’ troppo preoccupata a curare i rapporti con Usa e Russia. In questo modo perdiamo le grandi opportunita’ offerte dall’Africa.

Solo le Ong religiose e laiche stanno svolgendo un lavoro prezioso, mentre le nostre aziende, troppo frammentate, sono assenti rispetto agli altri Paesi. Un’attenzione particolare merita la Cina.  L’unico Paese che fa una politica continentale in Africa – ha concluso Prodi – e’ la Cina, che ha rapporti con quasi tutti i paesi dell’Unione Africana ed importa capitali uomini e tecnologie.

(Com/Pn/Adnkronos)
13-LUG-09 18:41