Tuning discordant voices, a challenge for U.S., EU in Canada (2)

08:48, June 28, 2010      

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However, the United States and Canada didn't appreciated the new tax, considering it barrier to free credit flow.

A stricter financial supervision has become global consensus, so what remains are just disputes over formats, Aglietta insisted.

Accordingly, the French economist suggested to establish a global council, composed of banking and financial market representatives, to monitor financial risk and to coordinate and implement financial inspection.

Regarding the proposal of international bank tax, though Europe and the United States reached an agreement, Canada opposed it, arguing it's not necessary for countries, whose banking systems have no faulty performance, to adopt the bank tax.

While France and Britain are planning to levy banks after Germany, who announced to carry out the tax in March, Canada advocated effective international mechanism of financial regulations and establishment of emergency fund instead.


French President Nicolast Sarkozy has regarded the G20 platform a never-better working mechanism to coordinate global governance, thus he called to build it on and to strengthen the legitimacy of its resolution, in case agreements reached at the summit would degrade into empty words.

The French recommendation didn't seem to win U.S. support yet.

The founding CEO of the U.S. Studies Center Professor Geoffrey Garrett defined G20, in his 2010 Foreign Policy article, as a non- executive board undertaking structural reform of global economic governance, but not a management committee responsible for specific affairs.

The G20 resolution, in Goffrey's opinion, is to guide, reform and oversee the Bretton Woods system, while France judged that the Bretton Woods Agreement after the Second World War was already outdated, thus new rules should better present benefits of emerging markets and less-developed countries.

Disagreement, not a tiny one, still lies in terms of international financial system reform.

The United States aimed to persuade the Europe to spare more says in financial institutes for emerging economies, whereas the Europe insisted a principle of absolute majority in making decision instead of US one-vote veto privilege.

Tuning different tones is a challenge of the G20 summit. Unlike interests of the Europe and the United States, plus distinct starts and methodologies, would surely undermine the two major powers' efforts to agreements, analysts concluded.

Source: Xinhua
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