WASHINGTON: Financial leaders from the Group of 20 leading economies should reduce the number of issues they tackle, agree on measurable targets and set up a permanent secretariat to revitalise their work, a senior European Central Bank official said.
“The G20 seems to have lost its earlier momentum. The case for acting in unison has diminished now that the most acute phase of the global financial crisis is behind us,” ECB Executive Board Member Joerg Asmussen told a seminar on Saturday.
The G20, which has taken an active role in strengthening the financial system in response to the debt crisis of recent years, came together in 1999 when finance ministers and central bank governors of the world’s 20 biggest economies began meeting to coordinate policies and achieve global economic stability after the financial crisis of 1997 and 1998.
The G20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.
Asmussen, a former deputy finance minister for Germany, said that after successes like a coordinated response to a cyclical downturn, an agreement to boost the resources of the International Monetary Fund and reform of how it is governed, the G20 now needs to reform itself to be more effective.
“First, it is essential to return to a more focused agenda. The G20 should concentrate on topics where it can bring genuine value added compared to the activities of the formal institutions which, at the global level, deal with economic policy matters,” Asmussen said in a prepared speech.
He said the G20 should focus on financial regulatory reform, tax issues, macroeconomic policies and global financing and cut out additional topics like food security or labour issues.
“My second idea ...is the creation of a permanent secretariat for the G20. This would help to stay focused and avoid proliferation of new topics, which each new G20 Presidency introduces, often with limited results,” he said.
Asmussen said a small, dedicated G20 secretariat would foster continuity on technical topics, especially on issues which span over several years, like financial regulation.