

G20 Host Finance Minister Lagarde to EuroFora: 1st Act v. Oil+Food Crisis eyes special Global deal

*Paris/G-20 Finance/Bercy/Angelo Marcopolo/- The 1st G-20 Financial Summit to include Raw Materials' and mainly Oil and Food's prices' volatility, the "1st Risk" against "Recovery" of World's Economy, according to the 3 sets of Prorities outlined by President Sarkozy, which marked the beginning of the 2011 French G-8 and G-20 Presidency (See "EuroFora"s earlier NewsReports), did succeed to start building Worldwide concensus on the urgent need to face that issue, particularly when Popular Riots against Hunger and Oppression are currently spreading around many, mainly Mediterranean and Middle East Countries, but it also realized that the Heart of the matter lies elsewhere, i.e. in the Production itself of Agricultural and other Raw Materials, needing, therefore, a special treatment going further beyond, repl ied in substance G-20 Financial 2011 Host, French Finance Minister, Christine Lagarde, to "EuroFora"s questions.
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According to the Official Communiqué published at the Conclusion of the G-20 Meeting of Finance Ministers and Central Bank Governors in Paris, at the spectacular architecture of "quai Bercy"'s building accross the Seine River, after practically 3 Days of on the spot preparation already since the 17 - 18 - 19 February 2011, the participants from 25 Countries around the World, and Heads of relevant International Organizations (such as IMF, World Bank, UNO, OECD, EU, etc), "discussed Concerns about consequences of potentially Excessive Commodity Price Volatiity". In this field, G-20 decided to "work with International Organizations and to report back .. on the underlying Drivers, and the the Challenges posed by these trends, for both Consumers and Producers, and consider possible Actions".
Speaking 1st "on Food Security" in particular, and considering "the Impact" that this might have, (particularly at a moment while multiply mixing revendications for Democracy and against Hunger), G-20 stressed "the Need for Long-term Investment in the Agricultural sector", mainly "in developing countries". Moreover, G 20 Finance decided to "discuss at (its) Next Meeting the Report of IEF, IEA, OPEC and IOSCO on Price Reporting Agencies, as wel as the Interim Report on Food Security, currently being undertaken by the relevant International Organizations, and IOSCO Recomendations, and the FSB's consideraion of Next Steps on Regulation and Supervision of Commodity Derivatives' Markets, notably to strengthen Transparency and address Market Abuses".
Receiving also an "Interim Report by IEF, IEA and OPEC on how to "improve the Quality, Timeliness and Reliability" of the of "International Data" on "Oil", calling" for furtherwork on Strategies to implement these Recommendations", and "to improve the Producer - Consumer Dialogue", the G-20 urged IMF, IEF, IEA, GGECF and OPEC "to develop, by October 2011, concrete Recommendations on how to extend the G-20's work on Oil Price Volatility, also to Gas and Coal".
Lagarde confirmed that Concusions were naturally result of a "Compromise", after a "frank" discussion, but with "respect" of each other, and finaly conergence was found to advance forward, while in the G20 never anyone points the finger at any other country, it's not correct,as she diplomatically said
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=> Thus, "EuroFora" asked the Host of G-20 Finance Summit, French Minister of Economy, Christine Lagarde, during her concluding Press Conference, to be more precise, and make it clear whether : - "On Raw Materials, do you consider that the result that you succceeded to bring, as a 1st Positif Step, or as a Conclusion ?",

+ "And, concretely, concerning f.ex. the Agricultural Products, - which, according to FAO, (cited by EU Parliament's Resolution adopted Thursday in Strasbourg : See earlier "EuroFora"s NewsReport) recently reached an Historic Record, going Higher than ever since they started to be registered-, could be tackled efficiently with such kind of Measures, so that they might prevent the sudden eruption of Extreme Cases (f.ex. Food Crisis, Food Riots, etc) in the Future ?", "EuroFora" asked Lagarde.
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Christine Lagarde made it clear that - "It's not a Conclusion, but I think that's a Success, because it wasn't at all obvious that the issue of the excessive volatility of Raw Materials' Prices, mainy of Agricultural products, is of the competence of Ministers of Finance".
- "But we (G 20) concluded that, at the 1st hand, it has extremely Important Macro-Financial impact, and that, second, a Financial Expertise was needed, in order to appreciate the role played, namely, of the Derivative products on the Raw Materials, and on the Prices of the Physical Products", she explained in reply to "EuroFora"s question.
- "And I remind you that we have validated the establishment of a Working Group, under the auspices of Japan's Bank's vice-Governor, who is really an eminent personality, in order to have an accurate Analysis concerning the role of Speculation vis a vis the simple Law of Offer and Demand", Lagarde pointed out.
- "But, we all observed, nevertheless, that the phenomenon of Rarity, mainly on the Food area, needed Developments on the Production field", she observed, highlighting a New Horizon.

- "However, there, we sort out of our domains, (because) it's not for the Ministers of Finance to deal with such questions, which belong to the competence of Ministers of Agriculture, which is absolutely Legitimated, (particularly) in the current context", she concluded, obviously referring to the Democracy and Hunger Riots spreading accross several Mediterranean and Middle East Countries...
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+ Meanwhile, USA Secretary of the Treasury, Timothy Geithner, speaking at another Press Conference at Bercy to Journalists, including "EuroFora", acknowledged, namely, that "Rising Commodity Prices - including for Food and Oil - are causing Hardship in many parts of the World".

- "The IMF estimates that Commodity Prices increased 20 to 30 % in 2010", and "this has a Serious Impact on Inflation and on the Living Standards of the Lowest income Groups ...., where Food and Fuel tend to comprise a larger part of consumption", Geithner observed.
But, the US Official, adopting a stance somewhat closer to Brazil, eportedly opposed to any Regulation of Agricultural Products' markets, focused, at the 1st place, into stressing that "an effective response requires increasing Long-term Investments in Agriculture", particularly "in low-income Countries". This could be attained "through Mechanisms such as the Gobal Agriculture and Food Security Program", whichg is "designed to raise Agricultural Productivity and improve Rural Infrastructure to help Famers connect to Markets", according to Geithner.
However, he didn't explain how it might be possible for such "Low income Countries", as he said, to compete in the Markets with the huge, modern Agricultural Machine f.ex. of the USA themselves, attracting so big investments that it can easily produce at lower costs. Nor how Investors, in general, could Planify their projects accros Time periods, if persists the current extreme Volatility of Prices, which mark big, unpredictable Changes, (f.ex. after some "Extreme Weather Phenomena", as EU Parliament's relevant Resolution denounced this same week in Strasbourg : See "EuroFora"s earier NewsReport).
At any case, Geithner agreed, at least, that "We (USA) also support Measures to limit the potential for Market Abuse and Price Manipulation, through increased Transparency and OverSight of Commodity Markets, and the associated Derivatives' Markets. And these Pressures on Global Commodity Prices will be reduced, as the rapidy growing Emerging Economies act to tighten policy", he hoped.
But, despite differencies, in these and/or other issues, however, a striking point of convergence is that all those involved (from Brazil up to France and the US, etc) reportedly acknowledged, in one way or another, that the real problems about Agricultural and other raw materias concern their "Production" itself, in one way or another, (Comp. supra). Therefore, a special G-20 dimension, focusing on Ministers of Agricuture and so on, has, indeed, become necessary, as Lagarde concluded in her reply to "EuroFora"s questions (See supra).
However, EU Parliament's latest Resolution on Food Prices' Rise, adopted earlier this week in Strasbourg, pinpointed also the fact that morst of recent Food Crisis; had been provoked or seriousy aggravated by "Extreme Weather Events", (See earlier "EuroFora's NewsReports), as, f.ex. in the case of Wheat prices' inflation after the Record Heatwave which targetted Cental Russia in 2010.
+ Moreover, Oil Prices were often seriously aggravated, mostly after Wars a.o. Foreign Relations' incidents and sudden rises of tension.
Therefore, it's obvious that, when it comes to Raw Materials' Prices' Volatility, the real Causes may also belong to the Security/Defense (1st example) and/or to the Foreign Relations' (2nd exampe) areas, so that their resolution would concern much more the common Foreign and Security/Defence Policy (CFSP)...
It's, f.ex., an unforgettable fact that, at the very moment that a controversial, too expensive Pipeline was ready, waitining to be inaugurated and broker uncertain concluding deals at Ceyhun (Turkey, close to Syria's borders), suddenly, various provocations pushed at a Syro-Lebanese v. Israeli deadly clash at their own Borders, which gave an immediate pretext for Prices of Oil barill to jump up at unexpected Heights, so that the previously excessively Costly pipeline, all out of a sudden, .. mutated into an acceptable business deal, by a coincidence, exactly when this was needed ! Moreover, it's well known that the most famous War in Ancient History, that of Troie, described by Omer's poems, was, in fact, due, less into the Mass-Mediatic "romantic", cover-up Story of Queen Helen, etc., but much more to the Real-Politics' fact that a growing Ancient Greek World needed Free Access to nowadays' Ukraine-Russia-Kazakhstan's Wheat producing areas, while Troians wanted to keep the exclusive Control of the Dardanelles' straights.
Thereby, Lagarde's Opening towards a larger Horizon (See supra), in probable confluence, in substance, with most G-20 Gobal Players, at least on this point, clearly pointed at a Direction which seems, indeed, to be, in this crucial and topical issue, the Heart of the Matter ..

... inevitably reminding the Famous "Atom Heart Mother" Music Album, whose original cover topically pictures, simply, ..a Cow in a Green Field, even if it was composed by a former Scientist in Physics : "Pink Floyd"s Synthetic , sophisticated Music might, indeed, be an interesting symbol, perhaps inspiring Politicians to search and find the right "Synthesis" able to saveguard Global Economy's Recovery from Risks of Raw Materials' Price volatility, including Metals and Oil, but mainly Food, at the Crossroads of various but converging Policies (Comp. supra), which obviously need (after being adequately prepared by specialized Ministers) a Heads of State and Government Political impulse, which can only be given thanks to an Overall view that allow Summits as, f.ex. G-20's November 2011 concluding Summit at Cannes.
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Recent developments proved that Europe can suceed to overcome challenges by aiming at great objectives, and this is needed also in 2009, said EU chairman, French President Nicolas Sarkozy.
- "It's in the name of Great Ideas, Projects, Ambition and Ideals, that EU can overcome" challenges, stressed Sarkozy at EU Parliament in Strasbourg, in conclusion of a dense 7 months EU Chairmanship. "It's even easier for Europe to have Great projects, able to overcome national egoism, instead of limiting itself only to small projects" (unable to do alike), he observed.
- "Europe must remain Ambitious and understand that the World needs her to take Decisions". "The World needs a Strong Europe", which "thinks on its own, has convictions, its own responses, its imagination" : "A Europe which does not limit itself into following" others, (as it did in the Past, when it followed USA, f.ex. on Bosnia). On the contrary, "Europe should undertake its own responsibilities", he said, after a series of succes in stopping the War between Russia and Georgia, and organizing the 1st EuroZone's Summit in Paris, which incited the Washington DC G-20 Summit to extend similar decisions World-wide.
- "When you sweep it all under the carpet, prepare yourself for hard tomorrows", he warned. "What hinders decisions is the lack of Courage and Will, the fading away of Ideals", he stressed before EU Parliament's 2008 debate on Human Rights and Sakharov prize on Freedom of thought attributed by MEPs to Chinese cyber-dissident Hu Jia, followed by an EU - Turkey meeting on Friday.
- "I don't abandon my convictions" and "I will take initiatives" on EU level also in 2009, Sarkozy announced later. "France will not stop having convictions and taking initiatives" on Europe. + "It's an Error to wish to pass over the Heads of those who are elected in their Countries" : "It's an integrism I always fought against"', he warned.
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French EU Presidency faced 4 unexpected Crisis :
- An institutional crisis, with the Irish "No" to EU Lisbon Treaty, just before it started. A geopolitical crisis, wth the threat of War between Russia and Georgia risking to throw Europe back to Cold-war divisions, on August. A World-wide Financial and Economic crisis, arriving at a bad moment before crucial 2009 EU elections. And even a Strasbourg's mini-crisis, with EU Parliament's roof curiously falling down, from unknown reasons, in a brand new building on August, provoking an unprecedented transfert of the 2 September Plenary Sessions...
But it wasn't enough to stop Sarkozy ! On the contrary, it stimulated him...
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- "The better way to deal with the recent problems of EU institutions (as the "3 NO" by France, the Netherlands and Ireland) is to take them as a "Test" in order to find solutions closer to Citizens' concerns", said later in Strasbourg Sarkozy's new choice as Ministe for EU affairs, Bruno Le Maire.
- On the Institutional front, Sarkozy gave Time to the Irish to think about it, and stroke on December a deal including a New Referendum after the June 2009 EU Elections, in exchange of a promise to keep the rule of "one EU Commissioner for each EU Member Country", and some opt-outs on Defence and Fiscal EU policies, Abortion, etc. If the Irish get a "Yes" Majority, then the institutional package could be completed in 2010 or 2011 on the occasion of Croatia's probable EU accession.
He was accused in Strasbourg to upgrade EU Council and downgrade EU Commision, but he replied that "strong Political initiatives by EU Council reinforce also the more technical role of EU Commission, under the political-technical leadership of its President", all 3 "working together with EU Parliament".
- But, meanwhile, Sarkozy energetically spearheaded an Historic 1st Summit of EuroZone's 15 Heads of State and Government at EU's core, exceptionally enlarged to a partial participation of British Prime Minister Gordon Brown, on October 12 in Paris' Elysee palace, which started to tackle succesfully the growing world Financial crisis.
It also paved the way for its endorsement by a subsequent Brussels' 27 EU Member States' gathering, before it all come to Washington's G-20 Summit. And "Europe was united, it asked for the 1st G-20 Summit, and it will also organise the next G-20 Summit on April in London", he observed.
But a Conference with EU, Russia, African and other Developing Countries, hosted in Strasbourg shortly after Washington G-20 Summit by the French EU Presidency, took a Resolution asking to enlarge participation to Global Economic Governance. Many found, indeed, illogic and unacceptable that f.ex. states as Turkey were given a seat at G-20 level, while all African Countries, and even the African Union itself, representing the greatest Continent on Earth, were excluded...
Meanwhile, even USA''s "Paulson No 3" Plan, was, in fact, inspired by Europe's No 1 Plan", Sarkozy observed, largelly applauded by MEPs.
And "Europe showed Solidarity" by mobilizing some 22 Billion credit for Hungary, 1,7 billion for Ukraine, as we do nowadays for Baltic States, etc., he added.
The move on Economy was extended on December by an EU stimulus' plan totalling some 200 billion Euros, including 5 Billions released by EU Commission for big Projects, as well as various parallel National plans for Economic revival, (fex. 26 billions in France alone). They might appear limited, compared to USA President-elect Obama's reported plan to boost the American economy with 800 billion $, but at least succeded to overcome Europe's divisions for the first time on Economic governance, opening new horizons.
- The French President stressed even harder the unique role of an active EU Council's chairmanship, when he moved swiftly and efficiently, at the beginning of August, to succesfully stop War between Russia and Georgia, at the last minute, which threatened to bring Europe back to Cold War division.
"We (EU) also wanted to avoid a situation like in Bosnia, in the Past, when EU was absent, so that our American friends took their responsibilitues, and EU only followed", despite the fact that the conflict took place in Europe. Now, it was the EU who took its responsibilities".
A roadmap towards a new PanEuropean Security policy, before which all unilateral moves to place new Missiles (from USA or Russia) would be freezed, was proposed by Sarkozy after a meeting with Russian president Medvedev, at the eve of Washington DC's G-20 Summit.
Ukraine's "European" character was stressed at a Sarkozy - Jushenko Summit, September in Paris, while EU adopted on December an "Eastern policy", in which, "I'm convinced that our (EU's) future is to find with our Neighbours the conditions for Economic Development. Peace and Security, by explaining them that.. they must respect (Human Rights') Values, and adopt behaviors different from the Past", explained Sarkozy in Strasbourg.
Meanwhile, the "Union for the Mediterranean" was created, since July's Summit if 45 Heads of State and Government in Paris, as "an organisation for a permanent Dialogue, that we need", mainly in order to tackle the Israeli-Palestinian conflict, by bringing together, for the 1st time, Israelis and Arabs, where "Europe must be present, in order to avoid a frontal clash".
- "If Europe doesn't take its part for Peace in the Middle-East, nobody else will do that in our place", Sarkozy stressed.
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Meanwhile, other EU Agreements were brokered during the French EU Presidency on Immigration, (fex. common Asylum rules, etc), and Climat- Energy :
- On Climat-Energy, the 2007 German EU Presidency had fixed a triple 20% aim for 2020 (20% renewable Energies, 20% reduction of CO2 emmission, 20% energy efficience/economies), and the 2008 French EU Presidecny realized that, making the necessary compromises in order to modernize EU's industry, but without throwing some former Central-Eastern European Countries into abrupt Economic break down risking "social explosion".
- Defence-Security EU policy was mainly postponed for April 2009, since both German chancellor Merkel and French president Sarkozy want to strike a deal with the new American president Obama in Strasbourg's NATO Summit.
However, with all these 4 unexpected Crisis diverting attention to other urgencies, People wil wonder now, what happened to the famous deal proposed by freshly-elected French President Sarkozy on Turkey's controversial EU bid, back on August 2007, to continue EU - Turkey negotiations, but on the double condition that core chapters, intrinsequally linked with EU Membership, will be excluded, and that a collective Reflexion and Debate on Europe's future would start before the end of 2008.
It was meant to reply to the crucial question : What kind of Europe do we want in 10 or 20 Years from now : A large Market, or a Political Europe, with a popular identity ? In Sarkozy's thinking, presented in his 2 landmark speeches on Europe in Strasbourg, shortly before and after the 2007 Elections, (on February and July 2007), Turkey's controversial EU bid would be incompatible with the second choice.
It's true that EU Commision's Chairman, Jose Barroso, (who had notoriously declared, as former Portuguese Prime Minister, that he found "nonsense" the idea that Europe might become equal to the US), had repeatedly tried to avoid that Sarkozy's criticism on Turkey might start winning a larger audience in Europe, preferring a discrete "wismens' committee" work. And that most of the personalities later chosen in order to participate in a Committee on Europe's Future, are too much linked with Socialist parties and/or American policies, to be really critical of USA's notorious wish to impose Turkey to the EU, as Sarkozy had noted himself since March 2007..
- "It's on EU Council's presidency to take political initiatives. EU Commission has other competences", stressed Sarkozy. The "European Ideal" is to "build Europe with the States, not against them". "Ask Europeans to chose between their countries and Europe won't work. You don't choose between your two parents : We must add them together".
"France and Germany have an Historic Duty to work together, precisely because of what happened to the Past. We have to work hand by hand. We cannot be separated.It goes beyond me and Mrs Merkel today, Mr Schroeder and Mr. Chirac yesterday. It's not a choice, it's a duty to Europe and to the World". "We need Germany, as Germany needs Europe". Compromise is inevitable, here as everywhere, and each one made some steps towards eachother's positions.
But "it's true that Mrs Merkel didn't chose her Socialist partners, while I chose mine", Sarkozy said, in an indirect hint that the Socialist Minister of Finance in Germany might be a cause of minor past disagreements in Economy, which were overcome in recent negotiations.
"We (France and Germany) have particular duties in Europe", but "in a Europe of 27 Member States, it's not enough for France and Germany to agree between them.
"I always thought that Great Britain has a special role to play in Europe. ... Now, everybody "saw what it cost payed the UK for having been too exclusively open towards the US (and) Financial services. Europe needs the UK, but also the UK needs Europe" :- "We were able to face the hardest moment of the Financial crisis because the UK clearly chose Europe", stressed Sarkozy, reminding Gordon Brown's exceptional participation to the Historic 1st Heads of State/Government Summit of EuroZone, October 12 in Paris (See EuroFora's Reportage from Elysee Palace then).
- "Some look at Europe with old glasses aged 30 years ago. While we must look at her in relation to what it will be in 30 years" in the Future, Sarkozy concluded.