European Union (EU) leaders Thursday hammered out common positions for the upcoming summit of the Group of 20 (G20) major economies to be held in the U.S. city of Pittsburgh.
The following are the main elements of the EU's common positions.
ON FISCAL STIMULUS
Despite signs of economic recovery, the G20 should continue implementing stimulus measures in a coordinated way. Efforts must be maintained until recovery is secured.
However, exit strategies of phasing out stimulus measures need to be designed now and implemented in a coordinated manner as soon as recovery takes hold, taking into account the specific situations of individual countries.
ON BANKERS' BONUSES
The G20 should commit to agreeing to binding rules for financial institutions on bonuses to top mangers, backed up by the threat of sanctions at the national level.
Bankers' bonuses should be linked to long-term performance of the financial institutions they manage. Part of bankers' bonuses must be deferred over time for an appropriate period and can be canceled in case of a negative development in the bank's performance.
Stock options should be prevented from being exercised for an appropriate period of time.
Corporate governance of financial institutions should be enhanced to ensure appropriate board oversight of compensation and risk. Transparency and disclosure requirements should be strengthened.
Supervisory boards should be given the means to reduce compensations in case of deterioration of the banks' performances.
The G20 should also "explore ways to limit" bonuses to a certain proportion of either total pay or the bank's revenues or profits.
ON CLIMATE FINANCING
Financial resources will need to be scaled up urgently and substantially to reduce global greenhouse gas emissions to adapt to the unavoidable effects of global warming.
All countries, except the least developed, should contribute to financing the fight against climate change in developing countries with finance allocated according to need so that developing countries receive more than they are contributing.
Public funding commitment should be shared on the basis of a universal, comprehensive and specific contribution key reflecting ability to pay and responsibility for emissions.
The European Commission estimates that the total net incremental cost of mitigation and adaptation in developing countries could amount to about 100 billion euros (147 billion U.S. dollars) annually between 2013 and 2020, which should be shared between domestic finance, carbon market-based financing and international public support.
The G20 should recognize the need to fast-start international public support for addressing urgent climate financing needs in developing countries during the period 2010-2012, which amounts to7 billion euros (10.3 billion dollars) per year.
ON GLOBAL TRADE
The G20 should reiterate its stance against protectionism and continue to press for progress in trade liberalization, including with regard to a global, ambitious and balanced conclusion of the Doha Round negotiations in 2010. In this respect, a realistic and ambitious roadmap should be agreed on.
ON INTERNATIONAL FINANCIAL INSTITUTIONS
The EU stands ready to provide an additional contribution of up to 50 billion euros (74 billion dollars) to reinforce the lending capacity of the International Monetary Fund (IMF), so the EU's total contribution would be 125 billion euros (184 billion dollars).
The EU calls on all G20 members and other financially strong IMF members to contribute their fair share.
It is necessary to reform the governance systems of international financial institutions by increasing the voice, quota and representation of underrepresented countries, based on objective criteria reflecting changes in the world economy, the EU leaders said.