Tomorrow I will begin meetings with my fellow G20 Finance Ministers as well as Central Bank Governors in Paris, ahead of the G20 Leaders’ Meeting to be held in Cannes early next month.
These meetings come at a critical juncture with two of the world’s biggest growth engines – Europe and the US – misfiring at the same time, hitting confidence and causing major volatility in the global economy.
This weekend’s meetings continue the work of G20 Finance Ministers in Washington in September which effectively highlighted the serious threat posed to the global economy, as well as the urgent need for European policy-makers to take action to restore the confidence of markets.
This weekend I will reinforce how critical it is for European leaders to speak with a united voice and take decisive action to get their fiscal positions on a sustainable footing, while supporting short-term growth where possible.
In the face of the serious challenges confronting the global economy, strengthened international policy cooperation is more important than ever. The G20 has committed to take all necessary actions to ensure the stability of the financial system and support domestic growth through structural reform efforts.
Finance Ministers and Central Bank Governors will also progress work on the G20 Framework for Strong, Sustainable and Balanced Growth to tackle the global imbalances which underpinned the global financial crisis and global recession. In particular, it is vital that all G20 members continue implementing reforms to lift growth and create more jobs.
The G20 also needs to ensure the IMF has the necessary resources to support adjustment, in particular in Europe, to meet all possible contingencies. This was a message I clearly conveyed to my colleagues at the IMF Annual Meetings in Washington in September and have continued to stress as we head toward this week’s meetings.
I will also continue reinforcing the importance of combating protectionism in all its forms.
On Monday I will meet with senior Government and business leaders in London, where I will underscore the fundamental strengths of the Australian economy.
Despite the ongoing turbulence, Australia has a strong economic growth outlook, low unemployment, very low public debt and an unprecedented pipeline of business investment.
As the IMF noted last week, we have a proven track record of dealing with global economic turbulence, and this means our economy is well positioned to respond to the instability we are currently seeing abroad.
Australia is clearly not immune from the current turbulence in the global economy which has hit confidence around the world, including in Australia, causing volatility in markets and increased consumer caution.
While this global instability will inevitably impact on the Australian economy and the budget, our successful response to the global financial crisis and strong fundamentals mean we remain better placed than almost all other advanced economies.