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?
this was the year of the food riots. We are already abovethe 2008 peak.Lastly, the international monetary disorder in which welive has generated an unprecedented increase in tradeimbalances. It is very simple. Trade imbalances havedoubled since 2000.CLIMATE CHANGE/ DEVELOPMENT/DIGITAL ECONOMYThe third characteristic - and I will come back to thesolutions later; I think it is best to look at possiblesolutions after sharing our analysis with our partners.Naturally, if the analysis is not shared, if we do notagree on the analysis, we cannot agree on thesolutions. The third characteristic takes the form ofglobal challenges: climate change and developmentchallenges, which call for global responses. I will say again, and I will keep saying that we haveallocated and pledged US$100 billion a year todeveloping countries, starting in 2020. That was apromise. That was Copenhagen. How can we keep thiscommitment, when our countries have unprecedentedbudget deficits, without tackling the issue ofinnovative financing? Innovative financing is a criticalissue for France.The "new" G8 should launch the public debate atpolitical level. At my meeting with President Obama, Iwas very pleased that he agreed with us that at the G8we should have a very informal discussion about theInternet. Note that the idea is in no way to contain thedevelopment of the Internet and its content. The Internet represents progress, there is no doubtabout that. The Internet gives everyone the possibilityto access universal knowledge and no one woulddream of repressing this positive development. Yet the Internet does raise substantial topics fordiscussion for us leaders. The G8 is made up of eightextremely modern economies in which the Internet ishighly developed, so it is the right forum for discussingthis issue.France will hold a forum on the eve of the DeauvilleSummit with the G8 countries' leading players in the digital economy. I believe that the time has come to trust one another and build a model based on the combination of our skills, by listening to whatthe major Internet actors have to say, and I am surethey are most responsible and will listen to what wehave to say, so we can find the way forward to acivilised Internet.I set out to give you an outline of the challenges.Obviously, we are not starting from scratch and our presidency's first priority is to ensure that thedecisions taken at the last five G20 summits are putinto practice.FINANCIAL REGULATIONThis is the case, in particular, with financial regulation.In less than two years, considerable progress has beenmade, even though, as I know all too well, publicopinion finds it hard to believe. It is true all the same.New rules on bank capital, hedge funds - nowregulated where they answered to no authority before -bank taxes introduced to curb systemic risk, and thesupervision of bonuses, on which everyone now agrees.I see that Morgan Stanley has announced it willhenceforth defer payment of 60 per cent of itsbonuses. This is a little more than we asked for.On the long untouchable tax havens, 600 taxtransparency and information exchange agreementshave been signed since April 2009. Thirteen countrieshave waived banking secrecy for tax purposes. And we will have the first evaluations from the GlobalForum on national legal frameworks so that we canstart making decisions.Development will be a second major challenge for the G20.I would like our double presidency to prioritise Africa.We will focus our efforts on infrastructures. At theCannes Summit, we will adopt a list of concreteprojects, with their financing, that will be launchedimmediately. The high-level panel tasked withidentifying these projects will be chaired by TidjaneThiam, Chief Executive of worldwide insurance groupPrudential and former Ivorian Minister of Planning andDevelopment. I thank him for accepting this mission.The third element is innovative financing. I was just talking about this. France is in favour of a taxon financial transactions. France considers that thistax is morally sound, given the financial crisis we'vejust been through, that this tax is useful to dissuadespeculation - I can explain this if you have anyquestions - and that this tax is effective for finding newresources for development. I am well aware that this tax has great enemies andadversaries standing in its way. We will endeavour toconvince them. We will work with Mr Meles, PrimeMinister of Ethiopia, who has produced an excellentreport, and France will ask a civil society figure to findinnovative solutions at the border between the privateand public sectors. France believes that the tax on financial transactionsis the best solution, but that it cannot alone solve theentire question of innovative financing. We're thereforeprepared to discuss other solutions, even though wefeel that this tax on financial transactions - and I can018G8 MEMBER COUNTRIESPhoto: © OT Deauville/Patrice Le Bris