Nicolas Berggruen Institute
Paris, October 27, 2011

21st Century Council of the Nicolas Berggruen Institute

Shaukat Aziz, former Prime Minister of Pakistan

Nicolas Berggruen, Chairman Nicolas Berggruen Institute

Gordon Brown, former Prime Minister of the United Kingdom

Fernando Henrique Cardoso, former President of Brazil

Juan Luis Cebrián, Chairman of PRISA

Jack Dorsey, Founder of Twitter

Mohamed El Erian, CEO of PIMCO

Jendayi Frazer, Senior Advisor Nicolas Berggruen Institute

John Gray, Professor Emeritus, London School of Economics

Reid Hoffman, Founder of LinkedIn

Chad Hurley, Founder of YouTube

Francis Fukuyama, Professor Stanford University

Felipe Gonzalez, former Premier of Spain

Fred Hu, Founder and Chairman of Primavera Capital

Arianna Huffington, Founder of Huffington Post

Mohamed Ibrahim, Founder of Celtel International

Pascal Lamy, Director General of World Trade Organization

Eric X. Li, Founder Chengwei Capital

Alain Minc, Author and President of A.M. Conseil

Kishore Mabhubani, former Permanent UN rep from Singapore

Festus Mogae, former President of Bostwana

Elon Musk, Founder of PayPal

Dambisa Moyo, Author Economist

Rodrigo de Rato, former Managing Director of the International Monetary Fund

Pierre Omidyar, Founder of eBay

Nouriel Roubini, Co-Founder and Chairman Roubini Global Economics

Gerhard Schröder, former Chancellor of Germany

Peter Schwartz, Strategist, Futurist

Eric Schmidt, Chairman of Google

Amartya Sen, Nobel Laureate

Michael Spence, Nobel Laureate

Joseph Stiglitz, Nobel Laureate

George Yeo, former Foreign Minister of Singapore

Fareed Zakaria, Jounalist and Foreign Policy Advisor

Ernesto Zedillo, former President of Mexico

Ahmed Zewail, Nobel Laureate

Bijian Zheng, Director of the Academic Committee of China Central Party School

The ambition of this group is to build a consensus, though not each of us agrees with every element of this statement.


PARIS — Once again the world economy is on the brink. Only three years ago America was the epicenter of crisis. Today it is Europe. An enormous insecurity about the future has gripped ordinary citizens and investors around the world. Frustration and anger are spilling into the streets.

Once again the G-20 must act to prevent a devastating slide into a deep contraction, if not depression, and avoid a damaging retreat into protectionism and competitive devaluation.

At the Cannes Summit, the G-20 countries must recognize once and for all that, in today’s tightly linked global economy, no single country or bloc of countries is immune to spreading fragility and volatility. The advanced and emerging economies alike are highly vulnerable to economic and financial turmoil beyond their borders.

The only answer to this challenge is for each to work with the others, make the requisite adjustments and reach a common balance to the benefit of all. We must acknowledge this convergence of interests as the heart of the G-20 process so we can begin to build a sustainable community of interests at Cannes and beyond.


It must refresh its declaration from the London summit to strengthen the independent surveillance capacity of the IMF, enhance its quotas and reform governance so it reflects the new weight of the emerging economies. There is all the more reason to effect this shift in the near term since the emerging economies are being called upon to participate in the financial stabilization of Europe.

To become an effective institution of global governance and build a community of interests over the long run the G-20 should consider establishing an Executive Committee with a permanent secretariat so there is continuity of policies and decisions across the succession of summits. As with the UN Security Council, the Executive Committee should have permanent members representing all regions, with rotating temporary members.

Further, at this critical moment when protectionist temptations are re-emerging, the G-20 should reaffirm its commitment to open trade and investment globally by completing the Doha trade round and delivering new concrete steps that benefit developing countries.

The G-20 has proven itself once in managing a great rupture that resulted from an unsustainable imbalance in the global economy. It must do so again at Cannes to avoid another rupture. To wait for crisis to act is to invite crisis itself.


Unless there is an anchor of hope for the future, economies navigating historic revolutions will drag inadvertently drag countries backward.

Emerging countries, including the BRICS, should take an active role in stabilizing the Middle East through joining the wealthier Arab states and the West in investing the region in education, science and technology upon which broad long-term growth must be based.


As importantly, the G-20 must insist on strengthening anti-corruption measures, transparency and good governance in the private sector and with respect to international trade.

One key area the G-20 must address in the future that goes hand in hand with these initiatives is fulfilling its pledge to meet the Millennium Development Goals, with the goal on education an urgent economic necessity no less than a moral imperative. To that end, we propose that the Mexican presidency in 2012 highlight this issue on its agenda.


The G-20 cannot ignore the encroaching realities of climate change which are becoming ever more menacing. The opportunities for economic growth and job creation in developing clean energy are enormous at a time when there is massive joblessness. Since the G-20 encompasses over 80% of global GDP, its role is central. Here too the convergence of interests is apparent. Future G-20 meetings must not fail to focus on this matter through actions, including low-carbon growth strategies, on its own as well as within the United Nations context. President Sarkozy’s initiatives on “food security” and innovative finance for development — so that the poorest and most vulnerable among us don’t suffer most from the present instability — could not be more critical at this moment. As a matter of geopolitical and energy security, it is in the interests of all G-20 countries to support stability in the Middle East. The G-20 should agree on a coordinated, if not common, approach to fostering rapid economic development in the region. If the G-20 wants to remain credible in this second round of global turmoil, it should fulfill all the commitments it took at previous meetings. We therefore urge President Sarkozy to press the G-20 countries to develop a credible global growth and employment strategy that aims at inclusive growth by narrowing the income gap within countries and across national boundaries. and fairly sharing the burden across countries.


Today Europe is the urgent priority. We certainly welcome the Brussels agreement on Greece’s sovereign debt and the more realistic “haircut” for bondholders, an increase in the firepower of the EFSF to 1 trillion euros and bank recapitalization as decisive, necessary and major steps forward.

But Europe’s fiscal, banking and political crisis must also be resolved in a way that does not hamper growth prospects in the short term while putting into place credible long-term policies to reduce deficits. If everyone pursues austerity today there is no way out for those with unhealthy balance sheets. Where deficits and interest rates are too high, governments have no choice but to consolidate. Where balance sheets are healthy and interest rates low, there is more room to support growth.

Greece can have no credible strategy to return to growth without supportive Eurozone action of some kind. It cannot do it alone without the exchange rate or inflation as tools.

As other central banks have realized, easing credit restraint is a necessary condition for growth. That is no less true for Europe.

Without such complementary and coordinated policies, Europe’s sovereign debt – as well as America’s mortgage debt — will continue to weigh us all down and impede any return to global growth. Inevitably, we must accept orderly restructuring as necessary for some with a greatly enhanced European Financial Stability Fund that walls off others from contagion.

Even as Europe seeks outside help from lenders, including from the more resilient emerging economies, the European Central Bank must stand as the lender of last resort.

As everyone should by now realize, Europe’s leaders must further commit to far greater integration though a fiscal union, deeper economic coordination and move toward political union or face the collapse of the Euro.

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