French objectives at G7 were largely achieved, says President

G7 summit – Economic policy/fight against tax evasion and optimization/COP21/fight against terrorism/Brexit – Press conference given by M. François Hollande, President of the Republic (excerpts)

Ise-Shima, 27 May 2016

The G7 has just ended; the objectives France set itself, in this important international framework, were largely achieved.

Global economy/growth/investment

The first objective was to get the world’s leading countries to reaffirm the priority they attach to growth. As one of the participants said, “things are going better, improving for the global economy”; there’s significant growth in the United States and growth is picking up in Europe.

But there are a number of uncertainties and difficulties. The first difficulty is the weakness of the emerging economies, even though the pace of growth remains impressive. The second uncertainty is the erratic currency fluctuations and volatility on the foreign exchange markets. Then there’s a third uncertainty, which moreover affects Europe: the British referendum and the possibility of a Brexit.

In view of both these indisputable improvements and these undeniable risks, the strategy is to boost growth by every means, through budget policies – where possible – as much as monetary policies (which explains the weak interest rates) and structural policies to further improve the labour market.

The crucial issue is investment, public and private investment. France has opted for the investment approach. We’ve supported the conditions for investment by increasing measures to promote innovation, and will continue to do so.

Similarly, we support domestic demand, consumption has also recovered, and we’re making sure that our fiscal policy, even though it is reducing the deficits, is implemented without undermining household income – quite the opposite, because taxes have gone down over the past three years.

TTIP

Growth is also linked to trade. The second objective we had to seek at this G7 was to ensure that the negotiations of the major agreements can continue, but that conditions are set. I’m thinking of the TTIP agreement in particular, i.e. the European Union-United States agreement.

The negotiations are under way, but France has made sure the conditions are restated. There can be no agreement if there’s no reciprocity – I’m thinking of procurement contracts –, if there’s no transparency – which is the very condition for people to be informed about what affects them –, if there’s no recognition of the geographical indication of products – which mainly affects the agricultural sector –, if there’s no recognition of intellectual property – which affects the cultural industries –, and if there’s no will to make sure that all services are concerned, which obliges the United States to go much further than it wants at the moment.

It was very important for France to be able to get its partners to restate these conditions. For us, there can be an agreement with the United States, regarding the European Union, only if these conditions are fully and strictly observed.

Tax evasion/optimization

Still on the subject of growth, there can be sustainable development only if transparency exists and tax evasion and optimization are combated. In this respect, what happened with the so-called “Panama Papers” scandal was useful in demonstrating that we must go even further. And this is what the G7 also acknowledges. As regards the exchange of tax information, lists of tax havens must be clearly drawn up, so that those on the list suffer the full consequences and the financial institutions can’t be involved in those markets or that finance. Finally, there has to be a coordinated battle against tax schemes whose sole objective, for the major multinational groups, is to escape tax.

Escaping tax through optimization, escaping tax through shell companies. Here too, the G7 went further in the fight against [tax] fraud, against optimization, and in actual fact against finance when it doesn’t reflect the goals of financing the real economy.

COP21/climate

In the framework of this G7 meeting, I also wanted the success of COP21 to be followed up and built on. We were joined this morning by the United Nations Secretary-General, all the international institutions – the World Bank, the IMF – and also a number of countries representing not only Asia but also Africa.

There was an agreement to be swifter in ratifying the agreements signed in New York in April, so we must set ourselves the target for the agreement adopted at COP21 to come into force at the end of the year.

We must also implement what was launched in Paris, particularly the initiative on renewable energy and carbon pricing. And we agreed that the most developed countries should move even faster in putting together their strategy for a decarbonized economy, so that commitments can be shown before 2020.

We also stressed that the funding planned, the $100 billion from 2020 onwards, should be able to be identified, and some even released before that date.

In a way, COP21 invited itself here to the G7, and the G7 embarked on a new stage of implementing it.

Health/medicines

France also wanted to launch an initiative on health at this G7 summit, and it was widely subscribed to. There are lessons we must learn from a number of scourges which, sadly, have occurred, particularly in Africa (Ebola, Zika etc.). So we must draw conclusions from them and create health emergency platforms, which the G7 member countries once again wanted to reiterate.

France also wanted the issue of medicine prices to be discussed, so that prices can reflect the needs, transparently, and so that the Least Developed Countries’ populations can be treated with medicines, which are accessible but still too expensive.

It’s a public health challenge for those countries, and it’s also a public health challenge for us. Moreover, we also committed ourselves – Mrs Merkel also emphasized this – to the goal of universal health coverage, which will take time and justifies our creating a sort of health structure on an international scale. In the coming months, the G7 member countries’ health ministers will meet to go further on these three goals.

Terrorism

But the G7 also necessarily embarked on the responses expected of it on the international situation. First of all, the G7 drew up an action plan against terrorism, with an essential exchange of information, a strengthening of air security, and a fight against everything that can help finance terrorism, particularly in terms of the anonymity of transactions. And this demands cooperation at the highest level to eradicate terrorism in all its forms, but also everything that can fuel terrorism.

Trafficking in cultural goods

One of the concrete illustrations I’ve given is combating the trafficking in cultural goods which the terrorists themselves organize. They have two dark intents, which nevertheless accurately reflect their idea of the world. The first desire is to make money from world heritage, to pass on rare assets removed from the places they occupy and gain resources to fund their activities by means of this trade. There are always accomplices, traffickers, buyers, so it’s necessary to engage in the essential battle and identify those objects.

There’s also the terrorists’ wish to destroy, to wipe out the memory of civilizations, to act as if nothing existed before the barbarity they represent.

It’s very important for countries to coordinate to protect cultural goods. This may mean taking them in before it’s too late, in what’s called “asylum” or refuge for cultural goods, which we’re doing. And also piecing together cultural goods after they’ve been, as it were, rescued. That’s the goal that will be pursued by the G7 countries.

Refugees

We also discussed the issue of refugees. It’s an issue which is, of course, of interest to Europe because of what’s happening in Iraq and Syria, and of interest to the Middle East, because it’s the countries of the Middle East that are making the bulk of the effort. But there are also millions of refugees in the world, in Africa, in Asia; many of them are climate refugees – the number in Asia is at least 20 to 25 million – and there are more every year.

So there’s a global plan to conduct, to organize, to ensure that the refugee issue is handled at the right level and before it’s too late.

Iraq/Syria

As regards Iraq and Syria, we signalled a wish for negotiations to resume on Syria’s future; and regarding Iraq, we decided to lend financial support to that country, which has been experiencing war and instability for too long. And there was a package of loans that can be provided to Iraq, and France will play its part in that.

Ukraine

Yesterday evening we also discussed the Ukraine issue. We recalled the Minsk process. As you know, a few days ago we organized a Normandy-format teleconference between Mrs Merkel, myself, President Poroshenko and President Putin so that progress could be made. Progress was made, moreover, with the release of prisoners to ensure greater compliance with the ceasefire. The electoral law must now be drawn up, decreed and implemented. Sanctions will be adjusted in line with the implementation – including by the Russian side – of the Minsk agreement. I’m insisting that no time be wasted. The Minsk agreement provided for elections due to be held in the spring. They were postponed. It’s very important to have this electoral law so that it can give eastern Ukrainians the chance to express themselves. So sanctions will be maintained until the process is fully implemented, but they can be adjusted if it’s proven that the agreement is being implemented.

Israel/Palestine

Finally, let me point out that the G7 supports the peace process between Israel and Palestine and the initiative France launched with the support of many countries in the region but also most of the countries that want a solution to be found, an initiative that will therefore lay the groundwork for the ministerial conference due to be held at the beginning of June.

That, essentially, is the response the G7 provided – a G7 that excluded no issues, a G7 that also wanted to discuss security, stability in every region. The G7 is not only a body whose first duty is to support economic activity and growth, to provide responses to people’s most urgent needs, it’s also a political body that must enable issues – particularly the most sensitive ones, the ones affecting peace and security – to be tackled. (…)./.

Published on 09/06/2016

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