The world has been struck by four economic shocks with cumulative effects: the monetary crisis; latent conflicts between emerging countries and countries of the OECD; transformation of consumer demands on an unexpected scale; ageing of the global population.
All of this allows us to understand and to predict the likely evolution of the global economy for the next six months, yet also puts a question mark over the economy's recovery during the second half of 2010.
The situation is serious and calls for drastic measures.
The ten proposals set out by the Circle of Economists:
At the global level
1) Establishing the G20 as a worldwide economic coordinating body in place of the G7/G8, responsible as well for problems relating to trade, exchange rates and stabilisation of raw-materials prices.
2) By the end of 2009, strengthening the banking and finance regulation undertaken in London, before the consensus between Anglo-Saxon countries and the rest of the world fades away.
3) Strengthening the Financial Stability Council's and the IMF's functions in anticipating and resolving financial imbalances and the IMF. Reassessment of IMF voting rights.
4) Holding an International Conference at the end of the first quarter of 2010 to reform rules relating to world governance: THE RENAISSANCE CONFERENCE. This decisive initiative is essential to make the G20 the arena in which conflicts at a global level can be resolved.
In preparation for this Conference, the G20 should:
1) Create new tools for stabilizing monetary zones, making possible a more balanced distribution of central bank exchange reserves;
2) Undertake analyses of global needs by 2015 in the areas of energy and the food industry, and implement production mechanisms that improve the balance between supply and demand in these markets;
3) Devise new mechanisms for transferring public funding towards countries in the Southern hemisphere to compensate for private funding, with the goal of doubling public aid for development within five years;
4) Take charge of the implementation of commitments that will be made in the post-Kyoto era during the Copenhagen Conference in December of next year, in particular at the financial level and with regard to better management of the climate as a global collective asset;
5) On the economic level, one imperative for the G20 is to not raise interest rates before lasting growth returns, at the earliest by the end of 2010.
At the European level
6) Coordinated strengthening of plans in support of the labour and investment markets in growth sectors. Real implementation of the Lisbon strategy.
7) Give the European Central Bank and the Eurogroupe, working in collaboration, the resources to manage exchange rates.
8) Rapid organisation and publication of real European banking "stress tests".
At the French level
9) Massive restart of investment at the end of 2009 and beginning of 2010. Reach a consensus on the sectors to be favoured, as well as on the types of funding and methods of loan investment.
10) Allot one-quarter of the resources devoted to boosting the higher education and research sector to partially resolve unemployment among the young. Massive orientation of employment policies to aid in the fight against exclusion and in particular towards extending and securing career paths.
In this context, seeking structural reforms is more necessary than ever.
