I have the honor to speak on behalf of the European Union. The Candidate Countries Turkey, Croatia*and the former Yugoslav Republic of Macedonia*, the Countries of the Stabilisation and Association Process and potential candidates Albania and Montenegro, as well as the Republic of Moldova, Armenia and Ukraine align themselves with this statement.
Since our previous meeting last year in April, there have been unprecedented global developments. The world has been hit by a growing series of crises. No country has been spared of the effect of the financial and economic crisis.
The impact has been hard on developed and developing countries alike, but in particular on the least-developed and most vulnerable countries of the world. In the developed world, where the crisis originated, economic and social consequences are also particularly hard (increase of unemployment, for example). In the EU, several countries have been particularly severely hit.
The initial prediction that developing countries will be isolated from the worst impact of the financial crisis has thus shown to be too optimistic. The crisis may have long-term consequences on developing countries on all areas, including those covered by the Millennium Declaration, the Monterrey Consensus and by the Doha Declaration: investment in infrastructure, jobs creation, growth rates, private equity flow remittances and so on, not to mention the social impact of the crisis.
The EU will remain a reliable development partner and we continue in our search for solutions. Apart from the already mentioned Monterrey Consensus and Doha Declaration, where the EU played a key role, we have all expressed our support for further exploration and implementation of voluntary innovative financing mechanisms. We have also registered a successful event last September in Accra, which emphasized and reinforced the principles of aid effectiveness as enshrined in the Paris Declaration. The cost of aid ineffectiveness is considerable and the full implementation of the Accra Agenda for Action should be a matter of urgency.
According to the data from the World Bank, developing countries face a financing shortfall of $ 270-700 billion this year. In the last year, the number of poor has grown from 850 million to 925 million. It is possible that the number of poor will, as a result of the current crisis, exceed 1 billion. The achievement of the MDGs is under threat. This could lead to serious political and security implications, as well as humanitarian, environmental and economic consequences.
Today, more than ever, it is important to act in unity, in a coordinated, coherent and comprehensive way. The United Nations, as a universal body, have in that respect the legitimacy and the duty to contribute to providing an efficient response to the international economic crisis, in particular towards helping the poorest and most vulnerable to mitigate the impact of the crisis.
Our meeting today aims precisely at this goal. If we want to be successful, we have to adhere to the principles of coherence, coordination and cooperation in practice. In this regard, we wish to confirm the crucial role the UN plays in global economic and social matters. At the same time, we acknowledge that its capacity to promote economic and social advancement of all people as defined in the UN Charter needs to be strengthened and possible measures with regard to effective functioning of the institutions need to be identified in the near future. We need to enforce the principle of good governance, eliminate duplication of efforts and achieve high leverage and maximum synergies.
The G-20 Summit in London has been an important milestone by the scope and the balance of the decisions reached: a stimulus package to mitigate the impact on the real economy, a strong solidarity signal sent to developing countries, improvement of the regulation, measures on trade, reform of governance of the international economic and financial system. The development agenda has not been forgotten. Indeed, measures that should promote confidence for future sound developments which would benefit all members of our international community have been adopted. The summit has also called for an increased role of the UN system in specific sectors.
The EU also welcomes discussions in the G-20 on a charter for sustainable economic activity as a new global consensus on key values and principles that will promote sustainable economic activity.
The EU supports developing countries in responding to the effects of the crisis and in promoting development as part of the solution to the global crisis and a basis for peace and stability. We are convinced that only a globalisation that is complemented with social progress will bring sustainable benefits to both industrial and developing countries. We also recognize the collective responsibility to mitigate the social impact of the crisis and are committed to support those affected by the crises by helping to create employment opportunities and through income support measures. We will honor our commitments for development assistance and reaffirm our commitment to deliver on the Millennium Development Goals. The EU supports the activities of the Multilateral Development Banks focused on helping counter the effects of the crisis in developing countries, particularly as regards the poorest and most vulnerable populations, and strongly supports pledges to make available resources for social protection for the poorest countries through facilities such as the World Bank’s Vulnerability Framework.
Out of the wide range of measures that the EU considers to be important for global recovery, the following are of fundamental importance: continuing the international coordination of fiscal stimulus measures; giving priority to restoring the functioning of the credit markets and facilitating the flow of lending to the economy; ensuring consistency of fiscal measures with longer-term measures such as sustainable public finances, improving productivity, and addressing the challenges of ageing populations and climate change; and keeping markets open and avoiding all forms of protectionist measures. We are of the strong opinion that free and fair trade is a key element for global recovery and we call for a rapid and balanced outcome of the Doha Development Agenda. This will be the best guarantee to prevent protectionism. Aid for Trade plays a crucial role to enhance export capacities and to intensify regional economic integration, thus helping developing countries benefit from open global markets. In this respect, the EU is committed to annually delivering 2 billion worth of Aid for Trade by 2010. We also support the ILO´s Decent Work Agenda and call on ECOSOC to support the ILO campaign to extend social security to all.
We consider the new initiatives of the World Bank, such as a new financial crisis facility to fast-track funds to developing countries, as an important component of our development efforts. We appreciate the Multilateral Development Banks commitment to increase their financing to countries in need by up to $ 100 billion over the next three years.
The crisis revealed major failures in the financial sector and in financial regulation and supervision at both the global and national level. Indispensable preconditions for finding the way out of the current financial and economic crisis are restoring confidence and proper functioning of the financial market, stricter oversight of the financial markets, and reform of the global financial system. Thus, finding an adequate response to the economic and financial crisis, as well as preventing future ones, remains our main task. The EU welcomes the efforts undertaken by the IMF over the last months in adjusting its institutional and financial set-up to ensure that it can assist members effectively in the current extraordinary global economic and financial environment. We have committed, consistent with the new income model, that additional resources from agreed sales of IMF gold be used. The EU supports the threefold increase of IMF resources to counter the adverse effects of the financial crisis. In this context, EU Member States will provide a fast temporary support of the SDR-equivalent of 75 billion in aggregate. Moreover, the EU welcomes the creation of the FSB that includes all G-20 members, and the decision to speed up the process of governance in the World Bank and the IMF. We are determined to play an essential role in reforming and modernising the international financial institutions, especially to reform their mandates, scope and governance so as to reflect the relative economic weight of actors in the global economy and give greater voice to emerging and developing economies, including the poorest.
When it comes to development financing, the EU is the world leader. The assistance that it provides to developing countries comprises 59% of total global assistance. This clearly shows our commitment to the development agenda.
In previous years, ECOSOC undertook first steps towards reform. The EU fully supports such efforts, their full implementation as well as further steps to reforms which is necessary to ensure greater transparency, cohesion, flexibility, and effectiveness of the entire system and allow it to play its role of coordination.
Thank you for your attention.
*Croatia and The former Yugoslav Republic of Macedonia continue to be part of the Stabilisation and Association Process.