G-20: Fact Sheet on Cannes Action Plan for Growth and Jobs

G-20 Leaders today agreed to implement a comprehensive set of policies that will help reinvigorate global economic recovery.  Under the “Cannes Action Plan for Jobs and Growth,” G-20 Leaders agreed that “strengthened international policy cooperation is needed now” and that their “ultimate objective is to provide more and better jobs for our citizens.”

Since the Seoul Summit in November 2010, financial stress has increased sharply and the pace of economic growth has slowed, most notably in the advanced economies.  The most serious risk to the global recovery is the financial crisis in Europe.  However, events in Europe are not the only risk; progress to rebalance global demand has stalled.  In this regard, emerging markets must do more to bolster domestic demand and help sustain global growth. 

With the Cannes Action Plan for Growth and Jobs, G-20 members agreed to implement “measures to secure the recovery” including:

• Europe’s Leaders agreed to restore debt sustainability in Greece, strengthen European banks, build firewalls to avoid contagion, and lay the foundations for robust economic governance reform in the Euro area and call for their swift implementation.
• To help support stronger and more self-sustaining growth, specific commitments include:
  • The United States will implement a package of tax reforms and targeted jobs and investment measures to support the U.S. recovery, consistent with a credible plan for achieving fiscal sustainability in the medium-term;
  • Japan will quickly implement reconstruction measures; and
  • Australia, Brazil, Canada, China, Germany, Korea, and Indonesia, where public finance are relatively strong, will let automatic stabilizers work and will take additional discretionary fiscal measures if economic conditions require it.
• Emerging market economies with external surpluses commit to implement policies that will support domestic demand-led growth and move more rapidly toward market-determined exchange rates.
• To take all actions necessary to preserve the stability of banking systems and financial markets, and to ensure that banks are adequately capitalized. 
• To ensure that the IMF has adequate resources to fulfill its systemic responsibilities. 

In addition to the emphasis on job creation and growth in the near-term, Leaders agreed to an action plan to strengthen the medium-term foundations for growth consisting of: sustainable public finances, open trade and investment markets, structural reforms to boost growth and enhance job creation, increased saving by countries with current account deficits and increased private demand by countries with current account surpluses, reforms to national and global financial systems, and actions to promote development. 

Specific commitments include:

• China committed to rebalance demand toward domestic consumption, promote market-based interest rate reform, and move further toward capital account convertibility.  The G-20 welcomes China’s determination to increase exchange rate flexibility consistent with underlying market fundamentals.
• Saudi Arabia commits to helping stabilize oil markets in support of the global economy.
• All G-20 members commit to keep global markets open and resist trade protectionism.
• Many G-20 members committed to implement structural reforms to boost long-term growth potential and enhance job growth prospects.
• Countries with large current account surpluses commit to boost domestic sources of growth by implementing measures to increase growth of consumption and investment as a share of GDP.  
• All G-20 members committed to full and timely implementation of financial sector reforms, including Basel II, II.5, and III along the agreed timelines.

The commitments made today to pursue stronger and more balanced global growth, flexible exchange rates, financial and structural reforms, and sustainable public finances will lead to a stronger and more sustainable growth path globally and in the United States, and to the good jobs that our citizens need.