France breaks 2015 deficit-cutting promise

(Reuters) - France announced on Wednesday it was breaking the latest in a long line of promises to European Union partners to cut its public deficit, conceding it now would take until 2017 to bring its finances in line with EU rules.

EU bans arms exports to Central African Republic

(Reuters) - The European Union on Monday banned the export of arms and the sending of mercenaries to Central African Republic, which is racked by sectarian violence.

France's Hollande flags need to cut labor costs

(Reuters) - President Francois Hollande said on Friday France needed to cut the high cost of labor in France to bring down stubbornly high unemployment in the euro zone's second-biggest economy.

France calls on Europe to ease off austerity

BRUSSELS (AP) — France has called on fellow European nations to ease off on painful austerity policies to give the economy some breathing space and avoid social upheaval.

Challenging France to Do Business Differently

PARIS — Louis Gallois, one of France’s most influential industrialists, knew he was about to make waves for the country’s Socialist president.

Merkel, Hollande pledge to consult on EADS

LUDWIGSBURG, Germany (Reuters) - France and Germany pledged on Saturday to consult closely on plans by Airbus parent EADS and Britain's BAE Systems to forge a new aerospace and defense giant, but announced no joint decisions on the $45 billion merger plan.

France, US and G20 president Mexico weigh emergency meeting to tackle soaring food prices

PARIS: France, the United States and G20 president Mexico will hold a conference call at the end of August to discuss whether an emergency international meeting is required to tackle soaring grain prices caused by the worst US drought in half a century.

Debt crisis: France must find €10bn of savings

France must find up to €10bn (£8bn) of savings to bring its budget deficit under control this year, finance minister Pierre Moscovici has said.

Analysis: French G20 commodity rule hope may prove forlorn

France's push to get the world's leading economies to toughen regulation on commodity markets may prove to be like herding cats as most governments see little benefit in new rules that could harm their financial interests.

Many say improving market transparency and raising food production is the way to tackle price volatility and few expect last month's call by G20 farm ministers for regulation to bring coordinated hard action among the Group of 20 leading economies.

France calls for common G-20 trade finance rules

By Nathalie Boschat

PARIS -(MarketWatch)- France wants the Group of 20 industrialized and developing nations to agree on common rules for trade finance in order to foster a level playing field in international trade, French junior minister for trade Pierre Lellouche said Monday.

Lellouche gathered his G-20 counterparts at the French ministry of finance Monday "to start a discussion on a common rulebook" for trade finance, he told reporters at the end of the meeting.

France Calls For G-7, G-20 Meetings On Japan Crises

France called Wednesday for finance ministers and central bankers of the Group of Seven leading nations to discuss the consequences of the multiple Japanese crises on the world economy and to prevent them from fueling volatility on global capital and commodity markets.

France also plans to hold a meeting of energy and economy ministers of the Group of 20 industrial and developing nations, to foster international cooperation on energy.

G-20 to weigh capital inflows, tie up with IMF: Japan

The Group of 20 financial chiefs will discuss this week destabilizing capital inflows to emerging market countries and collaboration with the International Monetary Fund to address the problem, Japanese Finance Minister Yoshihiko Noda said today.

Capital inflows to emerging economies will be a new, formal agenda, Noda told reporters, adding that the G-20 finance ministers and central bank governors will talk about what cooperation could be possible between the group and the IMF, an international lender in Washington.

France invites UAE to G-20 summit in Cannes

France invited Ethiopia, Singapore, Spain, the UAE and Equatorial Guinea to the Group of 20 nations summit which will be held in Cannes on November 3 and November 4.

The invitation of the five non-member countries was “in line with the principles defined by the G-20 under the Korean presidency and after consultations with all G-20 partners,” France said in a statement on Saturday.

French Fin Min: G-20 Must Protect Financial Product Consumers

PARIS (Dow Jones)--French finance minister Christine Lagarde Tuesday said she will ask her G-20 counterparts to define common principles on protecting consumers of financial products.

Consumer rights should be high on the agenda of the Group of 20 leading economies, Lagarde said in a statement ahead of next week's meeting.

FOCUS: G-20 Ponders More Inclusive Governance

PARIS (Dow Jones)--An updated report commissioned by French President Nicolas Sarkozy will recommend that the Group of 20 industrialized economies undergo a major structural overhaul while also expanding the powers of the International Monetary Fund to deal more effectively with future financial crises, according to one of the report's authors.

France, which this year holds the G20's rotating presidency, has made reforming the international monetary system, curbing the volatility of commodities prices and improving global governance its top priorities.

Sarkozy comes to Turkey wearing his G-20 hat

French officials are looking forward to their president’s visit to Turkey on Feb. 25. He will come within his capacity as president of the G-20. This will be his second visit with this hat after Washington. “This visit shows the importance France attaches to hearing Turkey’s views on issues that the G-20 will be tackling,” say French officials.

I cannot help but have a cynical attitude about the visit, which is expected to take place in Ankara probably without a stop in Istanbul, the financial center of Turkey. It is a known fact that Nicolas Sarkozy prefers to stay away from Turkey in order to avoid giving contradictory messages to his own public, which has always heard how Turkey needs to stay outside the European Union. This is also the view of German Chancellor Angela Merkel, yet this has not stopped her from coming to Turkey. It is not possible to understand Sarkozy’s anxiety of not being photographed on Turkish (or should I say Anatolian) soil. The G-20 presidency obviously provided an excellent pretext to come to Turkey.

Although I do not have the intention of overestimating the importance of the visit, I should not underestimate the perspective of the French officials, which is possibly shared by Turkish officials as well. Instead of looking at the visit from a cynical, negative point of view, they prefer to see the cup half-full. Although Sarkozy met Turkish leadership on the sidelines of international conferences, nothing takes the place of a visit. And at least, one can hope, he will have an extra five minutes in the plane before landing at Esenboğa Airport to be briefed on Turkish-French economic relations, and might be surprised with the volume it has reached. There might even be an extra five minutes in the car from the airport to the Prime Ministry for him to be briefed on Turkish views toward regional issues, which again he might find the overlap much to his surprise. And perhaps he might have an extra three minutes on his fight back to Paris to reflect on Turkey.

Obviously he cannot leave Ankara without touching on bilateral ties as well as the regional turmoil. Yet he will also have to lend an ear to what Turkey thinks of the global economic issues.

Most of the emerging economies that became interested in an enlarged G-8 were at the beginning solely interested in being part of it, Turkey included. At the beginning their contribution remained a little limited, as some of the essential international financial and monetary issues were rather managed directly by developed countries, although the rest of the world suffered consequences. Take the subprime mortgage crisis. As the system did not exist in Turkey, you would not expect Turkey or other countries to brainstorm for a remedy. In fact, leaders within Turkey’s state mechanism, as well as the opinion makers, did not ponder too much about what to do for a better international economic system, as they had enough to ponder about the problems of Turkey’s economy.

Actually in 2009, when Great Britain held the G-20 presidency, the British consulate, in cooperation with a Turkish university, initiated a series of conferences in Istanbul to brainstorm on the G-20 agenda. It struck me at the time that it was the British consulate that took the mission upon itself to stimulate discussion on international financial issues.

The ruling Justice and Development Party, or AKP, has ambitiously aimed to have a say in international organizations. In fact Foreign Minister Ahmet Davutoğlu is on the record saying that Turkey will and should have a say in shaping the new world order. The government takes pride when some countries in the southern flank tell Turkey it should be their voice in organizations like the G-20. In fact Davutoğlu has been saying Turkey will be the voice of the poor and the victim. It is no coincidence that the foreign ministers’ meeting of the Council of Europe in Istanbul will take place at the same time as the summit of less developed countries. In order to take on such a mission, Turkey needs to be well prepared. It seems that Turkey’s civil servants have been more active in the preparatory meetings, voicing detailed demands. In doing so, they should not neglect being in touch with those countries that expect their views to be voiced by Turkey.

Source: http://www.hurriyetdailynews.com

Tackle export bans to ease food crisis

Listening to President Nicolas Sarkozy of France one can only fear for the G20 agenda for food security and commodities policy.

Vitriolic attacks on speculators seem to be at the centre of the discourse. But behind the rhetoric – which is mostly linked to domestic politics – lies an interesting agenda that could really help to mitigate the current spike in volatility and prices in agricultural commodities markets.

While most politicians focus on speculation, I strongly believe that the current spike in agricultural prices was exacerbated by policy – export bans – and lack of information, as no one really knows what the current level of stocks is.

France must tackle both problems during Mr Sarkozy’s chairmanship of the G20, which runs till November. They may seem rather dull problems when it is more headline-catching to demonise speculators. But addressing these problems would do a lot more to bring down prices or, at least, mitigate volatility than another call for a clampdown on speculation.

The restrictions in agricultural commodities exports are legal under global commerce rules, even for those countries, such as Ukraine, that are bound by their membership to the World Trade Organisation.

The General Agreement on Tariffs and Trade, the core treaty of the WTO, has since 1947 banned “prohibitions or restrictions” on exports of commodities. However, it permits them when “temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential” to the exporting country. To add to the confusion, the treaty fails to explain what it means by “temporarily” or what is a “critical shortage”, leaving countries ample room for manoeuvre.

France is likely to find strong support for its proposal to regulate export bans from fellow European countries and Japan, South Korea and the US. But Argentina, Brazil, India and China are reluctant to back them. At the end, Paris may have to settle for some form of gentleman’s agreement on export bans, with promises from large exporters not to abuse them.

The other area in which Paris needs to make progress is in the effective distribution of reliable information.

I am told that when Russia imposed its export ban, resulting in a spike in the prices of wheat and other agricultural commodities, President Sarkozy demanded information about the level of stocks. Of course, he was right in asking for that particular piece of data: if stocks are high, they will cushion the lack of sales from a major exporter. His advisers were at pains to explain that the current information about global stocks, production and demand was rather poor.

In reality, we know little about the current status of global physical agricultural commodities markets. Only the big trading houses – Cargill, Archer Daniel Midlands, Bunge, Louis Dreyfus, Glencore, Wilmar, Noble and Olam – have a proper understanding of the situation.

Governments are mostly in the dark. A senior Western official recently told me that his estimates of stocks of wheat, corn and soyabean in China – which are widely followed by the market – are nothing more than “informed guesses”.

The problem is that many countries see information about agricultural commodities markets, particularly the level of stocks, as state secrets. Don’t expect China and India to welcome Paris’ idea for more disclosure. Even so, the G20 could offer more money and resources to institutions such the Rome-based UN’ Food and Agriculture Organisation to provide better and more up-to-date data. For that, the FAO should stop relying on information largely provided by member governments and instead do its own estimates based on field work and satellite images.

Both proposals surely sound less sexy than the attacks on speculators, but if Paris is able to achieve some advances, it could make a great difference in coming years.

Source: http://www.ft.com

France: G-20 should consider expansion

DAVOS, Switzerland (AP) — The Group of 20 leading rich and emerging nations should consider ways to give representation to around 170 countries that are left out, France's finance minister said Friday.

France holds the presidency of the G-20, which has been criticized for failing to include the voices of many nations — developed, developing and poor.

French Finance Minister Christine Lagarde told a news conference at the World Economic Forum that one possibility is to include a number of countries in one seat and rotate membership — as the International Monetary Fund's Executive Board does.

"We need to keep our objective of an efficient G-20 that continues to be credible, and in a way there is a dichotomy between the two," she said.

Lagarde said the group's meetings now include not only the 20 members, but five invited guests, which is "already quite a number" of leaders at the table.

The G-20 members are South Africa, Canada, Mexico, United States, Argentina, Brazil, China, Japan, South Korea, Indonesia, India, Saudi Arabia, Russia, Turkey, France, Germany, Italy, Britain, Australia and the European Union.

At the last summit in Seoul in November, the five invited countries were Ethiopia which chaired NEPAD, the New Partnership for Africa's Development; Vietnam which chaired the Association of Southeast Asian Nations; Malawi which chaired the African Union; Spain, one of the world's 10 largest economies, and the Netherlands, the 16th largest economy.

"To be efficient you need to have a closed circle," Lagarde said. "Equally, to be credible it has to be representative. and only having 25 nations is considered illegitimate or lacking representation by those 170 that are left out."

Lagarde said French President Nicolas Sarkozy alluded to a possible way to "close the gap between efficiency which requires a small number, and credibility that requires the representativeness of a much larger community."

In his address to the forum Wednesday, Sarkozy referred to the 25 participants at the G-20 summit but said he also referred to "24."

Lagarde reminded reporters that this is the size of the IMF Executive Board which has operated since its inception on the basis of chairs for major economic powers and chairs for groups of countries whose board participant rotates.

The U.S., Japan, Germany, France, Britain, China, Russia and Saudi Arabia currently have seats on the IMF board, but the rest rotate among different groups.

"Clearly, there must be consideration given to that interesting similarity between 25 on the one hand and 24 on the other," Lagarde said, "and that might be a key to this dichotomy between efficiency and credibility."

Source: http://www.bloomberg.com

France includes commods position limits in G20 plan

G20-leader France will make concrete proposals to regulate commodity derivative markets, despite its recent focus on ways to make physical trade more transparent, farm ministry sources said on Thursday.

France will propose including position limits, identifying commodity players as either speculative or commercial, while also seeking a framework to record over-the-counter, or non-exchange, trades, the sources said.

It holds the 2011 presidency of the G20 group of major economies.

France had said it wanted to regulate increasingly volatile commodity derivative markets but had given few details on its concrete proposals. Instead it focused on making physical markets more coordinated -- a target seen more attainable than a derivative market revamp.

Speaking in Davos, Switzerland, on Thursday, President Nicolas Sarkozy reiterated the need for more transparency of global agricultural supplies in order to curb wild swings in food prices.

Position limits are already part of the European Commission's proposals to clamp down on speculators in commodities under the Markets in Financial Instruments Directive (MiFID) but the source said the G20 would be a better option.

"The general outline is that when you are in a (derivative) market you can see who are the actors. Our second proposal is to try and limit the positions and to try to have a system to regulate -- but it will be extremely complicated -- OTC operations," one farm minister source said.

A regulation of EU markets in the same spirit as U.S. markets would shift trade to less regulated centers, it said, stressing that the G20 was the only body that could solve these questions.

Derivative market operators would need to declare themselves as speculative or commercial players depending on the basis of their main activities, the source said.

The farm ministry did not give details on position limits, stressing that financial issues would have to be negotiated by G20 financial ministers, rather than agricultural ministers.

For most of its proposals on derivative markets France would draw its inspiration from the U.S. Dodd-Frank financial reform law adopted last year, the source said.

PRAGMATISM

France's most concrete G20 plans for a better commodity markets regulation focused on physical markets.

The source detailed Sarkozy's proposal to create an agriculture database similar to the Joint Oil Data Initiative (JODI), administered by a producer/consumer body based in Saudi Arabia, which gathers oil data.

It could be called JADI for "Joint Agriculture Data Initiative" and gather information from sources including the U.S. Department of Agriculture (USDA), the United Nation's Food and Agriculture Organization (FAO), the European Union, the International Grains Council (IGC), and countries.

"The idea is that the signals given by the big producers are harmonized," the source said.

Large countries such as India and China had not given their answer on a proposal of an harmonized database yet, it added.

"Our wish is to obtain, within the G20, a consensus on the fact that there is volatility -- notably excessive volatility -- and we agree to put in place in a pragmatic way, some measures of transparency on physical markets, of transparency on financial markets, on which we think we can move forward," the source said.

Source: http://www.reuters.com

Noyer: G-20 Needs Common Diagnosis Of Global Monetary Problems

PARIS -(Dow Jones)- The Group of the 20 industrialized and developing nations must come up with a common diagnosis of the causes of the current foreign exchange instability, European Central Bank governing council member Christian Noyer said Wednesday, amid persistent worries that world leaders are struggling to see eye to eye the issue.

"France wants to open the debate. It's not about triggering big changes, but about drawing the consequences of the in-depth evolutions" that took place on the global economic scene, Noyer, who is also governor of the Bank of France, said in an address to financial market professionals here.

France has made reforming the international monetary system the top priority of its G20 presidency and wants the global currency system to be less reliant on the U.S. dollar and more multi-polar. But fostering consensus may prove challenging amid persistent differences between G20 members.

The debate is in particular locked between China and the U.S., with the latter calling on China to let the yuan appreciate faster, while China says low U.S. saving and interest rates are fueling volatile capital flows into emerging economies, putting upward pressure on their currencies.

Noyer said the reform of the international monetary system should address volatile capital flows and currency misalignments, as well as the excessive accumulation of foreign exchange reserves, in order to create a more balanced global growth.

French President Nicolas Sarkozy is due to outline the priorities of its G20 presidency in a speech Monday.

Source: http://www.automatedtrader.net