hese past two months, I have spent agreat deal of my time consulting.Consulting with heads of State andgovernment, but also with internationalorganisations, international trade unions, businessrepresentatives, economists, researchers and formerforeign heads of State and government.I have drawn this conclusion from these consultations:if the G20 wants to remain legitimate, it must remaineffective. Our aim is to tackle the essential issues thathave waited long enough, so that we can presentconcrete results to an increasingly impatient public.A number of ministerial meetings will be held:for the G8, the foreign ministers will meet to preparethe Deauville Summit, and the home affairsministers will meet to work on the fight against drugtrafficking, particularly in cocaine; for the G20, the finance ministers and central bankgovernors will convene. In addition, two otherministerial meetings will be scheduled, to which Iattach particular importance: the meeting of labourand employment ministers and the meeting ofagriculture ministers;Symposia and seminars will also inform our groupdiscussions, and I will have the opportunity to visitPresident Hu Jintao for a first seminar on the reformof the international monetary system to be held inChina in late March.Our presidency's ambition is simple: we live in a newworld, so we need new ideas. This new world is markedprimarily by an extraordinary change in the balance ofworld economic powers.WORLD ECONOMIC POWER BALANCEAt the end of the Second World War - that is, when theworld created the UN, the IMF, the World Bank andGATT - the United States accounted for 45 per cent ofworld GDP. In 1975, when the G7 was set up, theUnited States and Western Europe alone accounted fortwo-thirds of world GDP. Since the end of the 1990s,we have seen an extraordinary tilt in this balance.In the space of just ten years, from 2000 to 2010,China's weight more than doubled, overtaking Japanas the world's second-largest economy.In 2050, China could become the world's leadingeconomy ahead of the United States, India couldbecome third and Brazil fourth. Clearly, everythingcreated in 1945 was based on balances that no longerstand today.We have started to take these changes on board, asshown by the creation of the G20, which represents 85per cent of world GDP.The second observation that we can make followingthis shift in balance is that we live in a totallyinterdependent and increasingly volatile world, whereimbalances have not only escalated quickly, but alsogrown in magnitude.FINANCIAL VOLATILITY/FOOD PRICEVOLATILITY/TRADE IMBALANCESThis volatility is everywhere.I counted the number of banking crises and financialWELCOME016G8 MEMBER COUNTRIESAS FRANCE WELCOMES THE PARTICIPANTS OF THE 2011 G8 SUMMIT IN DEAUVILLE, THE WORLD FACES MULTIPLE CHALLENGES, MANY OF WHICH ARE BEING ADDRESSED BY THE FRENCH PRESIDENCY OF THE G8 AND G20. FINANCIAL REFORM, SECURITY, CLIMATE CHANGE AND DEVELOPMENT ARE ALL HIGH ON THE AGENDA, ASSURES NICOLAS SARKOZY, PRESIDENT OF THE FRENCH REPUBLIC, AT THE ELYSÉE PALACEPRESS CONFERENCETPhoto: © UN Photo/Jean-Marc Ferre
G8 MEMBER COUNTRIES017crises there have been. It is quite extraordinary. Overthe last 40 years, there have been 125 banking crises.And if you look at these last 40 years, you realise thatthese 125 banking crises have picked up extraordinaryspeed over the last 20 years. So, not only are theimbalances not slowing down, they are growing andcoming in quicker succession.If we look at international capital movements, since1990 the world has seen 42 crises caused by capitalflows suddenly drying up. For example, from 2008 to 2009, capital flows to Asian countries halved inweeks, if not days. How can countries be expected to resist and handle this kind of instability? It is totally impossible.On the foreign exchange markets too, the figures are enough to make your head spin. They areextraordinary. The daily volume of transactions hastopped US$4,000 billion per day. I know that thesefigures do not mean much to the general public, butthey are realities and we have to face them. US$4,000billion per day, that is the daily volume of transactions,on the foreign exchange market alone - up 20 per centsince 2007 following a 72 per cent increase from2004 to 2007.Here too, what worries me obviously is that there isnothing new in saying there is instability in the world;it is quite a different matter to show with figures thatthis instability is accelerating at astounding speed. Theconsequences will, therefore, be increasingly serious.Now, this same volatility on the foreign exchangemarkets, with the financial crises and the bankingcrises, is found - exactly the same - on the energycommodity market. In 2008, oil prices went from US$140 to US$40 per Brent barrel in sixmonths. Down by two thirds in six months. I do notthink energy consumption needs dropped by two thirdsin six months.If you look at agricultural commodities, food pricevolatility has tripled over the last 20 years, and thisalongside the growing financialisation of thesemarkets. This is all the more extraordinary when youconsider that agricultural production will need to haveincreased 70 per cent by 2050 to feed what will bythen be nine billion people on our planet.This is where you see how strong France will be bydefending the Common Agricultural Policy, the world'snumber two farming system, European agriculture,when farm production needs are expected to increase70 per cent by 2050. This is really no time to bedismantling the Common Agricultural Policy. Thesefigures speak for themselves.Food prices have started to rise again. At the end ofDecember 2010, the food price index topped its June2008 peaks. I have not chosen 2008 by accident, as?