Bretton Woods II? We Need a Second UN Finance and Monetary Conference

Closing Remarks by Jens Martens to the Civil Society Forum Doha

1. Let me start with a quote from the Draft Outcome Document:
“The environment for Financing for Development has improved over the past 6 years, primarily due to a significant improvement in domestic savings of developing countries but also because of a sustained expansion in world trade, record private capital flows, higher remittances, a reduction in debt burdens especially in heavily-indebted poor countries and a reversal in ODA from earlier declines. The development impact of these flows is enhanced by a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets and efficient, effectively regulated financial systems. These principles are essential to economic growth and prosperity and have lifted millions out of poverty and have significantly raised the global standard of living.” (para 2bis)

This paragraph is not agreed and hopefully will never be agreed, but I am wondering: Do the delegates who drafted these sentences live in a parallel universe, when they praise the “efficient and effectively regulated financial systems” that have lifted millions out of poverty? At least additional 75 million people are forced to live in hunger and poverty this year due to the global food crisis. What would they think when they had to read these sentences?

2. The world faces an unprecedented crisis of the current financial and economic system. But the negotiations on the Doha outcome document seem to continue as if nothing has happened. We miss any sense of urgency in the negotiations. What we need now is creative thinking and collective multilateral action instead of following the business as usual and muddling through approaches of the past.

3. Two weeks ago, the leaders of the 20 most powerful countries of the world met in Washington as the G-20. After three and a half hours they adopted a declaration on “Financial Markets and the World Economy” – a preliminary “to-do-list” to solve the current financial crisis. Without doubt, some of the 47 announced measures might be useful and necessary. But the G-20 failed to really address the root causes of the crisis. Instead, they primarily intend to stabilize the current financial system – a system that has been characterized for the last 20 years as “casino capitalism”. But we don’t need better rules for the casino. The casino has to be closed down!

4. That the Washington summit took place at the level of the G-20 and not the G-7 or 8 reflects the changing realities of the world and is a step in the right direction. But it would be a grave mistake to stop there and to exclude 172 governments and the global civil society from the decision making process about the future financial and economic system.

5. About 20 years ago the G-7 took the lead in promoting the Washington Consensus and its neo-liberal ideology of deregulation and privatization – the same ideology that caused the current crisis. We don’t need a new Washington Consensus of the new G-20, which primary goal is to stabilize the present system, without taking into account the needs and demands of the people who are most affected by the crisis and the structural causes of this crisis.
(The G-20 leaders made “a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems.”)

6. What we need instead is a new global consensus, name it New York, Geneva or Nairobi Consensus, of the G-192 – the members of the United Nations. This is the reason, why we are here in Doha at a conference of the United Nations.

7. We are not naïve. We are aware of the weaknesses and limitations of the UN. Its decision making process is painfully slow and its results are based on the lowest common denominator. This was the reason, why many Civil Society Organisations declared in Monterrey 6 years ago that they are not part of the Monterrey Consensus. The Monterrey Conference was important, but its outcome didn’t respond adequately to the urgency of the economic and social situation in the world. Since then, the situation has become even worse.

8. However, the UN is the only universal forum that is inclusive, the forum where nearly all governments of the world have voice and vote, and where civil society organizations have participatory rights. Therefore it’s worth to fight for the strengthening of the UN.

9. This brings me back to the draft outcome document of the Doha conference. The existing draft is weak and the negotiations proceed again painfully slow. But the text contains at least a few elements – although not agreed yet - which could bring incremental progress, for instance
* the upgrading of the United Nations Committee of Experts on International Cooperation in Tax Matters to an intergovernmental body of the UN (para 8)
* the proposal for new ad hoc forums to explore sovereign debt work-out mechanisms and the possibility of crafting permanent debt mediation or arbitration procedures (para 46), and particularly
* the proposal to convene a major international conference, under the UN auspices, to review the international financial and monetary architecture and global economic governance structures ( one of 4 and my favourite versions of para. 58).

The adoption of this paragraph would in fact mean to bring not only the global discourse but also the decision making process on the reform of the economic and financial system back to the United Nations.

10. You may ask, why back to the UN? Was it ever there? Yes, 64 years ago, when the first United Nations Monetary and Financial Conference took place – better known as Bretton Woods Conference. The preparation of this conference took nearly 3 years and the conference was attended by delegates from 44 countries – by the way more than twice the membership of the G-20.

What we need now is a second United Nations Monetary and Financial Conference. Doha could mark the first step towards it.

Civil Society supports UN-led Summit on finances

As one of the lead elements proposed for recommendation to the Financing for Development Review Conference, the Civil Society Forum supports an international summit on financial and economic architecture and global economic governance structures, in 2009. The Forum position challenges the proposal of some governments that the Bretton Woods Institutions organize an event, as well as moves to concentrate decision-making in the G-20 group of governments. Speaking to the plenary, Rana Al Sairafi, a civil society delegate from Bahrain, said “instead of focusing on ad hoc mechanisms like the G20, such a conference should be under the umbrella of the United Nations with the inclusive principles that govern the Financing for Development process, including the active participation of civil society organizations.” In preparation for the event, the UN should be asked to prepare a comprehensive review of the existing global financial architecture.

There are currently four alternate proposals (para.58) regarding the conference in negotiations for the Review Conference. The Forum recommendation supports the UN-led option. Addressing the Forum regarding the locus and purpose of economic governance, Jens Martens, Global Policy Forum (Germany) noted “The G20 failed to really address the root causes of the crisis. Instead, they primarily intend to stabilize the current financial system - a system that has been characterized for the last 20 years as “casino capitalism”. “We don’t need better rules for the casino,” Martens concludes. “The casino has to be closed down!”

Forum delegates spent Wednesday in sessions focusing on the six agenda items of the Review Conference, followed by intense workshops and caucuses on specific issues, including: women setting the agenda, addressing climate change, achieving the health MDGs, the Currency Transaction Tax, among others. Women, trade unions, and other sector-specific caucuses have met as well. Further recommendations on finance reform include support for the upgrading of the UN Committee of Experts on tax to become an inter-governmental body, moves to make international financial flows fully transparent, ending illicit transfers of resources, and ensuring rapid fulfillment of aid commitments and enhancement of quality and accountability of aid.

Civil Society Forum at Doha: The US a failed state?

“Is the United States a ‘failed state’? Its financial mismanagement has triggered a worldwide crisis.” Thus, Social Watch coordinator Roberto Bissio challenged some 300 civil society delegates, who are meeting since yesterday at the Ramada Plaza Hotel. The Civil Society Forum leading to the Financing for Development Review Conference is addressing the international crises that threaten our climate, development and social justice, developing recommendations for change to carry into the official Conference. The Draft Declaration to be considered by the Forum states:

“The world is consumed by an urgent triple crisis of energy, food and finance that not only threatens the realization of the MDGs, but also the stability of the world’s economies. The Northern governments and financial system are responsible for the current financial crisis, but the costs and the impacts are paid for by the entire world and by the poorest countries in particular. Moreover, climate change is threatening the lives and livelihoods of hundreds of millions of people, in the North and the South.”

Barbara Adams, a former UN official and Senior Fellow with the Global Policy Forum introduced delegates to the state of the negotiations, which continue in New York and will be finalized in Doha before 2 December. The final agreement must address decent work, growing inequality and continuing imbalances in the global economy and polity, she noted. Perhaps the most significant major issue remaining is the nature and organizing body for a “Bretton Woods II” international conference for a new global economic architecture, she pointed out. Many civil society delegates stress that such a follow-up event should be organized by the universally-based United Nations and not by the existing Bretton Woods Institutions.

The Forum is the penultimate step leading to the UN Financing for Development follow-up Conference convening at the Sheraton Hotel November 29. The Forum was opened by H. E Mohammed Abdullah Mutib Al Rumaihi, Deputy Minister of Foreign Affairs for Qatar and Dr. Ali Ben Samiekh El Marri, General Secretary of the National Human Rights Committee of Qatar. The Civil Society Forum continues through Thursday, November 27, when a final declaration for delivery to the official Conference will be agreed.

IMF head should not evade UN

While initially scheduled to attend the Doha Financing for Development Review in Doha, the IMF Managing Director Mr. Dominique Strauss-Kahn has hinted he is no longer planning to attend. This is very unfortunate and difficult to explain, especially given the extraordinary influence that has been given to the IMF in the drafting process (in fact, the IMF is on record making suggestions on the same footing with member states, even though only member states are supposed to formally make drafting suggestions and even though its intervention, with such representation regime, means an unfair advantage for some large developed countries in the negotiation). By withdrawing representation at the highest level, the gesture would send a political signal that seeks to undermine the strength of the UN process as it enters into critical matters of reform of international finance and at a very critical juncture in the negotiations addressing such issues at this moment in New York. In an open letter NGOs worldwide are urging Strauss-Kahn to attend.

The letter:

Dear Mr. Strauss-Kahn,
We, the undersigned, are writing to urge you to attend the Doha Review Conference on Financing for Development.
On November 29, governments of the world will gather in Doha, Qatar, to reassert their 2002 Monterrey Consensus commitments to “eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system,” and evaluate progress.
The Monterrey process was unique in that it represented a new and fresh type of multilateralism, one that sought to build bridges across governments, global institutions with different economic responsibilities, such as the one you head, development responsibilities, civil society and the private sector. Its multi-stakeholder nature generated the open, fresh approach needed for facing the challenges of global policy-making in a changed—and changing-- world. More importantly, in the collective agreement to build those bridges at the global level it also paved the ground for building those bridges at the domestic levels of governments.
In this sense, the Monterrey Consensus represented not a static, one-off event, but a dynamic one. It established an innovative process for dialogue: dynamic enough to allow for the adjustments that any learning process brings, but solid enough to ensure the continuity of a global partnership.
Though unforeseen at that time, the Doha Review Conference will take place at a time when those principles and commitments are more relevant than ever. A global financial crisis, the largest anyone alive has seen, is threatening to undo progress in poverty reduction and achievement of MDGs of several decades. The Conference also takes place amidst global crisis in food, energy and climate. The Monterrey follow-up offers the best hope of harvesting the broad-based knowledge, ownership, and political support that a response to these exceptional times call for. But it cannot work without all the partners at the table.
It is, therefore, with the utmost concern that we write to you to urge you to attend the Doha Financing for Development Review. We understand you are seriously considering not to attend this conference, even though you had committed at a very early stage. We believe were you to delegate this responsibility, it would send the wrong signal about the seriousness with which the IMF takes the challenges that we face, and how it perceives its role as a partner in solidarity with the international community of nations and organizations. It would certainly undermine its claims to leadership in global financial crisis response efforts.

To sign click >>> here.

UN Task Force on reform of global finance stands ready

On the eve of the World Financial Summit in Washington, General Assembly President Miguel D’Escoto announced the full composition of a high-level task force he is setting up to examine possible reform of the global financial system, including the International Monetary Fund (IMF) and the World Bank. Joseph Stiglitz (see photo), who won the Nobel Prize for Economics in 2001 and is a former chief economist at the World Bank, will chair the Commission of Experts on Reforms of the International Monetary and Financial System, which will suggest steps that Member States can take to secure a more stable global economic order. The commission’s other members are:

* Jomo Kwame Sundaram, the current Assistant Secretary-General for Economic Development and the UN Department of Economic and Social Affairs (DESA);
* José Antonio Ocampo of Colombia, who is a former Under-Secretary-General for Economic and Social Affairs;
* Zeti Akhtar Aziz, the Governor and Chairman of Malaysia’s Central Bank;
* Jean-Paul Fitoussi, Professor of Economics at the Institute d’Etudes Politiques de Paris in France;
* Avinash Persaud of Barbados, who is Chairman of Intelligence Capital Limited;
* Yaga Venugopal Reddy, former governor of India’s Reserve Bank;
* Eisuke Sakakibara of Japan, who is currently Professor at Waseda University in Tokyo;
* Chukwuma Soludo, the Governor of Nigeria’s Central Bank;
* Yu Yongding of China, the Director of the Institute of World Economics and Politics.

When D’Escoto announced the formation of the panel last month, he noted that “there is growing recognition that the current turmoil in the financial system cannot be solved through piecemeal responses at the national and regional levels but requires a coordinated effort at the global level.”

Trade Unions’ reform plan for the G20

Trade union leaders from the G20 countries will put forward a comprehensive plan to turn around the global economy, in meetings with world leaders in Washington DC on the eve of the financial crisis summit hosted by the US government on 15 November. The top level union delegation will discuss the plan with IMF Managing Director Dominique Strauss-Kahn, World Bank President Robert Zoellick and heads of government from the G20 countries. The world's unions are calling for a series of urgent actions to stave off the prospect of deep and long-lasting global recession, coupled with major changes in the running of the global economy to turn back decades of deregulation policies that have caused the current crisis.

According to the International Trade Union Confederation (ITUC), a fresh push for development and decent work is needed, as well as a "Green New Deal" to tackle climate change effectively. The detailed union proposals are set out in a recovery and reform programme entitled the Washington Declaration. "Immediate action is needed to get the world economy moving and boost employment. Governments need to be prepared to make further, coordinated, cuts in interest rates and to front-load investment in infrastructure, education and health to help stimulate demand growth and reinforce public services. This needs to be accompanied by tax and spending measures to support the purchasing power of low- and middle-income earners, and concrete steps to launch investment in green goods and services, to help address climate change", said John Evans, General Secretary of the Trade Union Advisory Board to the OECD (TUAC).

The ITUC and TUAC are co-organising the union summit which will be hosted by the US trade union centre AFL-CIO at its Washington DC Headquarters. Along with the immediate steps to stimulate the world economy, the trade unions are putting forward a comprehensive regulatory package to ensure global governance of the global economy with a strong role for the ILO in line with the new ILO Social Justice Declaration. Key elements of the package include: ( 1) Regulation of hedge funds and private equity, (2) Proper supervision of banks and global conglomerates, (3) Reform and control of executive pay and profit distribution, (4) Taxation of international financial transactions, (5) Reform of the credit rating industry, (6) Ending tax havens, (7) Protection against predatory lending, (8) Active policies for housing and for community-based financial Services.

The Washington Declaration also draws attention to the plight of the world's poorest countries, where the impacts of global downturn will hit hardest. It calls on richer countries to ensure that international targets on development aid and the UN Millennium Development Goals are met, and urges action to ensure that basic commodities, especially food, become affordable for the poorest.
The Declaration sets out the global trade union movement's platform for a new governance structure for the world economy. This must not be limited only to financial markets and currency flows. The new structure must overcome the major flaws in the current system, and ensure that emerging economies and developing countries have their rightful place at the centre of policy-making.

G20 must put fight against poverty at the center

The G20 must avoid small-scale tinkering and instead take immediate, aggressive action to tackle poverty while laying out an ambitious vision for reforming the world economy at its Financial Crisis Summit. In a new report, If Not Now, When?, international relief and development agency Oxfam says that people living in poverty will be hit hard by the financial crisis unless urgent action is taken, adding that the poor should not have to pay for rich countries’ mistakes. The International Labor Organization estimates the number of workers living on less than one dollar a day may increase by 40 million and those living on less than two dollars a day could increase by more than 100 million.

According to Oxfam, there is a risk that recessions in rich countries will lead politicians to take the short-sighted approach of cutting aid. Given the tiny amounts of money involved compared to rich country economies, this would do little more than offer symbolic budget savings, but at huge human cost. Aid to all developing countries last year was $104bn. In comparison the US and EU mobilized nearly 30 times this – around $3trillion – in the last few months to help bail out their banks.

In "If Not Now, When?" Oxfam says that global leaders should immediately develop a new international regulatory institution with teeth, to prevent future financial crises and protect the interests of workers, consumers, and the environment. This includes taking on the secretive tax havens which undermine regulations and rob poor countries' of vital revenue that could be spent on schools and hospitals. It also calls for leaders to build a new representative global governance structure to tackle the economic, climate, food and energy crises. Reform must include far greater roles for developing countries as well as the poorest. Rich countries are going to have to concede some power on governing bodies like the G20 because they are desperate to get their hands on the huge financial reserves held by emerging markets.

Oxfam urges global leaders to see the opportunity to develop a new 21st century political and economic system that puts people and planet before profits. Oxfam calls on the G20 leaders to do three things:

1. Honor the OECD pledge not to cut development assistance, and increase aid instead by an additional $140bn necessary to meet the UN target of 0.7 percent of GNI immediately. In addition, urgently extend credit to emerging markets facing liquidity crises.
2. Rewrite global financial rules and regulations, including tackling tax havens and moving towards a more stable exchange rate system, in order to make the market work for all and not just for the few.
3. Build a new representative global governance system that can effectively tackle the economic, food, and energy crises.

Voices on the upcoming G20 summit IV: UBUNTU

The “network of the networks”, UBUNTU which is presently running the World Campaign for In-depth Reform of the System of International Institutions has published the following statement regarding the G20 summit in Washington DC:

While emphasising that, of course, all people have the right to meet whomever and wherever they choose, we the undersigned, in the tradition of the statements issued by the UBUNTU Forum, wish to declare the following:

1. Our deep concern about the serious impact the implosion of neo‐liberal capitalism will have on humanity, an implosion which will surely be the last – although it unfortunately is still going on – of an economic model that we have denounced many, many times as extremely unjust and damaging to society.

2. Our perplexity, because the main protagonists who have worked to impose this model over the last 25 years, the G7 and the Bretton Woods Institutions (the
IMF and the WB) are now taking on the role of saviours in this disaster, when they should rather be seen as the guilty parties to a large degree, and should consequently accept the responsibilities that pertain to them.

3. Our indignation regarding the meeting called for 14 November in Washington for, among others, the following reasons:
a) That precisely Washington, home of the Government and Organisations most responsible politically for what is now happening, is the one calling the meeting.
b) That invitations to the meeting have been issued in a totally arbitrary and discriminatory form. As if, for example, the poorest countries, those who have suffered most from this model and will probably suffer most from the consequences of the current debacle, had nothing to say about what to do now and in the future.
c) That it not only fails to take advantage of but even overshadows the Doha
Conference on Financing for Development to Review the Implementation of the Monterrey Consensus, scheduled for 29 November to 2 December, especially when this Consensus includes a section on systemic ‐ structural issues, which have been worked on for months in the United Nations’ most pluralistic and transparent framework, and which, appropriately reviewed and extended in the current context, could contribute to opening the way to a new world economic and financial model.
4. Our conviction that the time has come for an in‐depth Reform of the System of International Institutions, so long demanded by many world forums, to begin to lay the foundation for a world democratic governance which, among many other things, would prevent the world having to experience another situation like this one. In any case, the ongoing world regionalisation processes should be considered amongst the new principles upon which the system must be refounded.
5. Our urge that in the headquarters of the United Nations, in the context of the imminent Doha Conference, the process towards a Multiactor World
Conference on a New International Monetary and Financial System and its New
Democratic Institutions of Governance immediately begins, with the active participation of all the relevant actors of the present world situation, and thus and most fundamentally with the participation of civil society and of social movements.

Voices on the upcoming G20 summit III: NGOs

In a letter to the Financial Times Aldo Caliari, the director of the Rethinking Bretton Woods Project, Center of Concern, in Washington DC writes today:

Sir, Does it really come as a big surprise that the level of ambition for the November 15 summit of Group of 20 leaders is so low? ("Don't bank on Bretton Woods II, says IMF chief", 8 November) It should not.

We only need to look back at what came out of the last time leaders of rich countries talked about a "new global financial architecture", in the late 1990s. The response conveniently underscored changes to the domestic financial structures of developing countries, rather than to those of developed countries or the gaps and dysfunctions of global institutions. Unless a much more inclusive approach is followed, giving an institutional platform for the voice of all developing countries, it is unrealistic to expect better results this time.

Fortunately, such a platform is available. Only two weeks after the summit, leaders of the world will meet in Doha, Qatar, to review progress in implementation of the 2002 International Conference on Financing for Development. Reform of the international financial system is a key item on the agenda. Indeed, the current draft outcome document contains a breakthrough call for a major review of the "international financial and monetary architecture, and global governance structures". The basis for the review is the 2002 Monterrey consensus, whose pertinent chapter constitutes the first north-south multilateral consensual framework for reform of the international financial system.

The Doha review clearly provides a much better forum to launch a long-term discussion on reform, one that gives some voice to the poor and vulnerable and that garners the broadly based knowledge, ownership and political support that needs to be behind such reform.

Only something with such multilateral roots deserves to be called "Bretton Woods II", and G20 leaders meeting in Washington should use the opportunity to lend their support to it.

Voices on the upcoming G20 summit II: The OECD

OECD is preparing a two-pillar action plan for governments, as part of a global response to the world financial crisis, calling for tighter regulation and oversight of financial markets and improved national policies to promote economic growth. OECD Secretary General Angel Gurría said the action plan would cover a wide range of areas, from financial regulation, corporate governance and fiscal policy to competition, employment policy, insurance and pensions. “The causes and consequences of this crisis are rooted in a wide set of inter-related policy areas and can only be addressed through integrated responses,” he told participants at a briefing seminar organised by the European Policy Centre in Brussels.

The OECD action plan will be organised around two pillars, he said. “First, align regulations and incentives in the financial sector so that market operators act in a tighter oversight and risk management environment. Second, review and upgrade national policies and improve policy coordination at the international level to restore the conditions for economic growth.” One of the key lessons of the financial crisis has been the critical importance of efficiently functioning financial markets for the stability of the real economy. “That efficiency relies not just on competition but also on effective regulation and supervision,” Gurría said.

Looking beyond financial markets, however, he emphasised that governments must also play their part in sustaining economic activity. “Automatic fiscal stabilisers are already helping to cushion the downturn, especially in Europe. But more needs to be done,” he said. “While social safety nets are in place in OECD countries, there will be a need to step up re-training efforts for those who have become unemployed. There may also be more pressure to help those who are in danger of losing their homes.” Finally, Mr. Gurría emphasised the urgency of keeping policy attention focused on other major challenges. “The current economic crisis demands tough decisions now, but it must not distract our attention from the other grave structural challenges that we confront.” Governments must hold fast to their efforts to address poverty, inequality and climate change, he said. “It is crucial, in the middle of the storm, that we don’t lose our sense of direction… that we keep our commitments to scale-up development aid, to keep global trade and investments open, to develop cleaner energy to protect our environment.”

Voices on the upcoming G20 summit I: The economists

The world is at a dangerous point. Governments seem unprepared for the next round of difficulties that will arise as the recession grows and financial crises spread to emerging markets. Economically and financially, there is a clear sense that things are spiralling out of control again. The G20 meeting in Washington next weekend is an opportunity for leaders to show that they have the will to solve the global crisis. In an E-book from VoxEU.org - edited by Barry Eichengreen and Richard Baldwin - some of the world's leading economists provide essays from on what the G20 should do. The authors identify four priorities for action:

1. In the financial sector, apply triage to stop the bleeding; in the real sector, use fiscal stimuli: There is unanimity on this. Governments need to move fast - and coordinate their actions - in recapitalising banks, guaranteeing cross-border bank claims, restructuring non-performing assets, and extending financial support for crisis countries. Similarly, there is an urgent need for an immediate, substantial, internationally coordinated fiscal stimulus. Here China has shown leadership, and other countries should follow. Leaders from some countries may argue that they cannot - that their national circumstances are special. This cannot be accepted: commitments should be announced on 15 November.

2. Strengthen the ability of existing institutions to deal with the crisis in emerging markets: The most urgent task is to augment IMF resources immediately so that the institution has adequate firepower. There are a variety of ways to do this, but absolutely no dissent from the view that action must be taken now.

3. Start thinking outside the box about longer term reforms: Several contributors argue for new approaches to the regulation of large cross-border financial institutions: an International Bank Charter, a World Financial Organisation, an International Insolvency Mechanism for financial institutions, or even a single global regulator. None of these proposals can come to fruition on November 15th but it is essential to start discussing them now.

4. Do no harm: The contributors argue for caution in introducing new regulation: don't clamp down so hard on financial institutions and transactions that they stop providing intermediation services or innovating. And don't respond to deep recession with protectionist measures that beggar one's neighbours and destroy the world trading system. In their communiqué, the G20 leaders should promise to avoid such actions - and announce immediate steps to make this commitment credible.

EU position for Doha unsettled by G20 summit

According to observers in Brussels, the G20 summit on 15 November in Washington has thrown a wrench in the works to finalize a common European position for the UN conference on Financing for Development in Doha, Qatar at the end of the month. EU heads of state are meeting in Brussels today to discuss the EU’s positioning at the Washington summit on the future of the international financial architecture. This architecture has an essential impact on the financing for development issues on the agenda in Doha. But the development perspective is low on the radar screen for the G20 countries invited to the Washington summit. And a development perspective is nowhere to be found in the preparatory paper for today’s EU summit.

It is against this backdrop, the EU Council of Ministers is moving towards agreement on its position for Doha. On aid, the question of clear timetables for Member States to implement their commitments to provide 0.7% of GNI in ODA will be left to Development Ministers at the 11 November Council meeting, with certain countries using the current economic context as an excuse to renege on their promises. On innovative sources of finance, some Member States refuse to consider funds raised e.g. through the air ticket levy as additional to their 0.7% ODA commitment, preferring to use these as compensation for declining aid budgets.

The EU position places a strong emphasis on the responsibility of developing countries for mobilizing their own resources for development, giving less attention to ways in which the EU is undermining their ability to do so. Several Member States are opposed to civil society proposals on taxation, such as upgrading the UN Tax Committee to an intergovernmental body, which would give it a stronger mandate on issues like EU tax havens which allow multinational companies to pay lower taxes to developing countries. The EU is also resisting strengthening the FfD follow-up process within the UN, which would help to ensure implementation of agreements reached in Doha.

According to the CIDSE network of catholic aid agencies, the choice is now clear: The EU can seize the opportunity of revisions to the international financial architecture to change unfair global power structures and rules that inhibit developing countries’ ability to finance their own people’s development. Or, it can continue to proclaim grand rhetoric about the impact of the financial, food, and energy crises on the world’s poor, while disregarding the interests of the vulnerable in the scramble for profile at the table of the world’s most powerful. CIDSE will organize a side event at Doha launching a new policy paper on taxation and development.

El Escorial statement stresses ‘New Green Deal’

The civil society network BankTrack has released Bank to the Future: El Escorial Statement on Banks and the Financial Crisis today in Madrid. The statement was drafted at BankTrack's annual strategy meeting, held in El Escorial de San Lorenzo earlier this week. It contains BankTracks´ current position on what is needed to deal with the unfolding financial crisis of today so that it will lead to a sustainable, robust and just financial system in the future. The statement recognizes that the world financial system is at the brink of collapse. It characterizes the current crisis as not only an economic and financial crisis, but one of governance and sustainability.

The statement stresses the need for a ´New Green Deal´. Such a deal would not seek to stabilize the economic system as it is, but also aim to transform it into one that helps solve the pressing social and environmental problems the world is facing. The fiscal spending that is necessary to stimulate crisis-affected economies entering recession should be directed at achieving social justice, the promotion of sustainable production and consumption systems, and the transition of the world’s economies onto a low carbon path.

The statement outlines a number of steps to deal with the crisis in each of these dimensions, including:

• eliminating the influence of banks in the political process
• ensuring democratic participation in the design of a new global financial order
• putting a "sustainable twist" on international banking rules (such as including environmental and social risks into capital adequacy requirements)
• ensuring complete bank transparency regarding risk assessment processes and transactions
• eliminating the shadow banking sector by introducing regulations and reporting requirements
• prohibiting speculation in the derivatives markets, particularly those related to food and energy
• reducing incentives for excessive risk taking, such as eliminating short-term, volume-driven bonuses.

The Statement concludes, "We face a time of dramatic change that presents unique opportunities. Now that the once-dominant forces of market fundamentalism have been discredited, a new, equitable, and sustainable future can be built on the rubble of past excesses."