Full Barroso, Van Rompuy Letter Begging For G-20 Money

Tyler Durden's picture

With the question of who will fund the majority of the EFSF, or the €560 billion of the €1 trillion, still outstanding, and with China no longer the slam dunk "dumb money" everyone had expected it to be, Europe turns to the next biggest beneficiary of maintaining the ponzi - the entire G20 itself. Below is the letter just sent out from the two Eurostooges in which they make it all too clear that money talks, or Europe walks. "We will implement these measures rigorously and in a timely manner, and we are confident that they will contribute to the swift resolution of the crisis. However, whilst we in Europe will play our part, this cannot alone ensure global recovery and rebalanced growth. There is a continued need for joint action by all G20 partners in a spirit of common responsibility and common purpose." Too bad Bernie Madoff went to jail before he could send out comparable letters to his own investors who by implication would have become "voluntary partners" with a gun to their head.

Full letter:

Joint letter of European Commission President José Manuel Barroso and European Council President Herman Van Rompuy to their G20 partners ahead of the G20 Summit in Cannes (France), 3-4 November 2011

Last night, on 29 October, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy have sent a letter to their G20 partners in order to summarise and explain Europe's comprehensive crisis response ahead of the upcoming G20 summit in Cannes on 3-4 November 2011. The letter states: "We will implement these measures rigorously and in a timely manner, and we are confident that they will contribute to the swift resolution of the crisis. However, whilst we in Europe will play our part, this cannot alone ensure global recovery and rebalanced growth. There is a continued need for joint action by all G20 partners in a spirit of common responsibility and common purpose." They call in this context for a renewed collective G20 spirit. The two Presidents also outline the EU's priorities for the G20 summit and stress that the Union's overall objective would be "to help restore global confidence, support sustainable growth and job creation, and maintain financial stability."

Full text of the letter:

"Dear G20 Colleagues,

The decisions we have taken in our G20 Summits to date have been crucial in steering us through the global financial and economic crisis. We have acted firmly and decisively with a sense of urgency and common purpose. In the current economic situation, with world growth slowing and the global economic outlook deteriorating, we need to renew this collective G20 spirit. So our overall objectives for the Cannes G20 Summit should be to help restore global confidence, support sustainable growth and job creation, and maintain financial stability.

Within the EU, we are taking all necessary steps to ensure the stability and growth of the euro area. The euro is at the core of our European project. On 26 October we agreed on a comprehensive set of measures to restore confidence and address the current tensions in financial markets. These measures include:

  • a sustainable solution for Greece. Our agreement puts Greece on track to reach a public debt ratio of 120 percent of GDP in 2020. The solution includes a voluntary agreement for a nominal discount of 50 percent of Greek debt held by private investors. This will ease market pressure on Greece and allow the country to continue its programme of reforms. We aim at concluding work on a second financial assistance programme by the end of the year.

  • a significant further strengthening of the resources of the European Financial Stability Facility (EFSF), which depending on the specific set-up is expected to leverage up to around 1 trillion euros. The subsequent ratification of the new European Stability Mechanism (ESM) Treaty will provide the euro area with a permanent instrument to support financial stability.

  • a coordinated plan to reinforce Europe's banking system. We approved a coordinated scheme to recapitalise banks across Europe and we are working to design an approach for medium and long-term funding of banks. Banks will be required to temporarily increase the ratio of highest quality capital to 9% after taking account of sovereign debt exposures. Supervisors will ensure that banks' plans for recapitalization do not lead to excessive deleveraging or undue pressure on sovereign debt markets.

  • determined action to ensure sustainable public finances and enhance growth. Euro area Member States that are experiencing tensions in sovereign debt markets will make a particular effort in terms of fiscal consolidation and structural reforms and we will accelerate our growth strategy notably by using the full potential of our single market of 500 million citizens.

  • strengthening euro area governance. We agreed to put in place a set of concrete measures to strengthen economic and fiscal coordination and surveillance within the euro area, going above and beyond the recently adopted package on economic governance.

We will implement these measures rigorously and in a timely manner, and we are confident that they will contribute to the swift resolution of the crisis. However, whilst we in Europe will play our part, this cannot alone ensure global recovery and rebalanced growth. There is a continued need for joint action by all G20 partners in a spirit of common responsibility and common purpose.

In Cannes we should aim for ambitious outcomes on eight priorities:

1) Restoring growth and tackling global macroeconomic imbalances. The EU's main contribution to Cannes is the above-mentioned package to ensure the stability of the euro area. But more needs to be done at the global level. Many of the distortions underlying the large pre-crisis imbalances are still to be addressed – including undervalued exchange rates in key emerging surplus economies, and insufficient domestic savings in some advanced economies. In Cannes, we need to adopt an ambitious Action Plan to address the short-term vulnerabilities the global economy is facing, and to strengthen and rebalance global growth over the medium-term. The discussion of the various risks to the global economy must be balanced, and all countries must take action. Given the ongoing tensions in global markets, we also need to continue to ensure sufficient resources for the International Monetary Fund to address crisis situations in a coordinated and comprehensive manner.

2) Making tangible progress on implementing the financial market reform agenda. Our internationally agreed financial market reforms must be implemented in full while ensuring a level playing field among all G20 partners. The EU is honouring its G20 commitments and has already launched the legal process for implementing the Basel III agreement. We look to all other G20 partners to deliver in this area and together we should accelerate work to advance on other agreed reforms, such as Over-The-Counter and commodity derivatives – where the EU is already moving – and bank crisis prevention and resolution on which proposals are currently being finalised. And further work is needed to extend the framework agreed on Global Systemically Important Banks to all Systemically Important Financial Institutions, effectively regulate shadow banking, and quickly move towards a single set of high quality globally accepted accounting standards. It is also time to make the necessary changes to the governance of the Financial Stability Board so as to underpin its monitoring function. At Cannes we should also make a clear commitment in support of the Global Forum's work on non-cooperative jurisdictions. The European Commission has recently presented a legislative proposal for a financial transaction tax in the EU. The introduction of a global financial transaction tax should be explored and developed further.

3) Making the International Monetary System more resilient. The current international monetary system, despite certain identified shortcomings, has on balance more than proved its worth in terms of global economic and financial integration. But there is scope for improvement and reform to strengthen economic surveillance by the International Monetary Fund. We should agree principles to guide G20 members in the management of capital flows and a roadmap for broadening the IMF Special Drawing Rights to facilitate the internationalisation of key emerging market currencies. Improving the cooperation between Regional Financing Arrangements and the IMF developing the Fund's toolkit to support countries during systemic stress are among the measures that we now need to address as a matter of priority.

4) Boosting trade as the most effective way to support global growth. We together with some of our partners have worked very intensively on the WTO Doha Round, but it is clear that the Round will not be concluded in 2011. This is depriving the global economy of a significant boost, and risks encouraging protectionist measures. We therefore want the G20 to commit to a roadmap for an active WTO negotiating agenda, in particular for least developed countries, as well as on broadening the scope of issues being considered by the WTO in order to address new global challenges. The G20 should renew its anti-protectionism commitment taken in Toronto and agree to ensure a global market and open trading system for raw materials that is sustainable and transparent and free from distortion. Cannes should also send a strong message to the WTO December Ministerial to finalise Russia's WTO accession by the end of this year.

5) Enhancing the social dimension of globalisation. As reaffirmed by G20 Labour and Employment Ministers the Cannes Summit should underline that employment and poverty reduction are at the centre of global economic policy coordination. Youth and female employment must feature among our top priorities.

6) Ensuring Food Security and Promoting the G20 Development Agenda and Innovative Financing. We need to address the global food security challenge by fully endorsing the Action Plan on Food Price Volatility and Agriculture agreed by G20 Agriculture Ministers. The G20 Development Agenda has become an important part of the G20 and we welcome this year's focus on food security and infrastructure. We look forward to discussing the report by Bill Gates on Financing for Development.

7) The G20 needs to tackle further the global climate and energy challenge and continue its fight against corruption. The G20 Summit will be an important opportunity to push for a successful outcome of the Durban Climate Conference (COP 17) and we welcome the initiative taken by the G20 to conduct further work on mobilising resources for climate change finance.

8) Improving global governance. Finally, we look forward to discussing the report on global governance by Prime Minister David Cameron.

The stakes for Cannes are high - for the credibility of the G20 and for each of its members. In the EU we have demonstrated our commitment to do everything necessary to restore confidence and growth. We look forward to a very constructive round of discussions with our G20 partners next week as together we take the necessary decisions to make a step change on the path of global economic recovery.

Yours faithfully.

Herman Van Rompuy José Manuel Barroso

Further information on the EU at the G20, including an online flip book with facts and figures: http://ec.europa.eu/commission_2010-2014/president/g20/index_en.htm

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slewie the pi-rat's picture

Rumpoystilskin!  give us the children back!

the ultimate uber-elite entitlement:  global governance, BiCheZ!

 

 

Popo's picture

Does anyone else find it particularly inappropriate (if not offensive) when the unelected Mr. Rompuy proclaims to act with "common purpose" and "collective spirit"?

stopcpdotcom's picture

This is what Common Purpose is up to in the UK:

http://www.stopcp.com/

 

 

 

ratso's picture

The letter is pathetic.  They are dreaming that there is a fairy godmother coming.  

The Eurozone will simply have to accept  very difficult financial terms for years because they were cowardly when they had to look the Greek thieves in the eyes and address their lies and theft.  Now they want the rest of the world to make believe along with them that the problems aren't as big as they really are and that all funds lent to the Eurozone will not just be thrown down the Greek, Portuguese and Italian ratholes.

Who will be so stupid as to put more money at risk in this mess?  

TheFourthStooge-ing's picture

Thus spoke Van Rumpy:

"We have acted firmly and decisively with a sense of urgency and common purpose to find a greater fool, a bagholder of last resort."

 

Buck Johnson's picture

Your exactly right, nobody wants to throw money down these ratholes including Spain and Ireland and other countries that are in the shadows waiting to explode along with others.  It's so funny that they plan to put 250 to 400 (I've heard so many different sums to this that I don't even think they are sure if they can get the money) which will be levereaged to 1 Trilion euros but they are running around to the rest of the world asking them for money.  Selling them bonds that are leveraged with the guarantee that if they fail the "possilbe" funded part will cover 20% of the failure.  Which all of that is on a foundation of toxic debt.  No on in their right mind would put money in this, no one.

Sean7k's picture

Absolutely. Fascism without the veneer of democracy, Rompuy is asking for greater central control over finance, labor,food, energy and the enviroment. Oh and China, let that damn Yuan rise, not a demand really, just another beggar bureaucrat with a meaningless threat- he has forgot the golden rule: he who has the gold, makes the rules.

Though China is worried they will be shut out of the gold derby while the US and Europe still hold most of the marbles.

Global financial coordination=global slavery and an end to fascism, as fascism requires imperialism and so we transition to totalitarian socialism. 

 

stirners_ghost's picture

Do you find it less offensive when elected officials speak in such terms? As if the voting preferences of some constitute an obligation for you? You should find Mr. Rompuy's declarations less offensive--he's no more threatening than a beggar.

Azannoth's picture

Just when you thought Europe could not sink deeper, you have 2 head cock-suckers beggin for money in the 'former colonies' yuk

IQ 101's picture

That is an amazing video, I.B. 

I hope all Z.H.ers will watch it.

The Big Ching-aso's picture

Rompuy just looking for another rump to hump.  

maxmad's picture

should be good for a 20 handle drop in the S&P once someone at the G-20 rips up the leter! 

maxw3st's picture

Can't wait for the futures market to open up today. Should be fun. But, if things run true to form this'll probably keep the Euro soaring for another week. I am fully prepared to keep my current short and add more to the pile at 1.45 and 1.50 as needed. The higher it goes the more profit will accrue on the way down. It was worth 1.10. With current prospects for prolonged recession that will decrease. 1.50 to parity would be sweet!

BurningFuld's picture

Herman says: "Da giant debt bomb is about to go off" Now everyone please play nice and the flowers will be out it the spring and the birds will sing.

erg's picture

Brother can you spare €560 billion?

Zero Govt's picture

The EC (European Communist Party) bankrupt again??

Eastern Europe 'genius' moves onto Western Europe ..i'm 'shocked' who wudda thunk it!!

theMAXILOPEZpsycho's picture

Baroso, Merkel ,sarko, pap...I just hate these lefty, academic euro beurocrates so much and I'm getting so tired to death of them; at least in the uk our leaders are openly ruling class elitists, thugs...

Can't we just gas them already? why all the waiting?

theMAXILOPEZpsycho's picture

in fact add to that..I'd like to gas people who voted for them as well...

how can people actually vote?? We always say no one will vote in the next election (like after the iraq war and tony Blair's going round the world lying; yet then plenty still turn out for "their civic duty")

fuck it I think EVERYONE SHOULD DIE!!!

...save for me and about 2000 well selected females...

ratso's picture

Don't imagine for a second that it is acceptable to say "I'd like to gas people..".

Freddie's picture

As evil as they are - they are better than the Chicago muslim.  Nigel Farage is so right about this evil EU scum.

Top_Kill's picture

A few more months of chaos and bureaucratic fumbling should advance the vatican backed global central bank. Everything is going forward as planned. We lose because they are experts in failure, which will only produce more of their solutions.

The Big Ching-aso's picture

Too many dykes and not enough fingers.    Or flannel shirts.

Popo's picture

Von Rompuy said:

"We have acted firmly and decisively with a sense of urgency and common purpose. In the current economic situation, with world growth slowing and the global economic outlook deteriorating, we need to renew this collective G20 spirit. So our overall objectives for the Cannes G20 Summit should be to help restore global confidence, support sustainable growth and job creation, and maintain financial stability."

 

Yeah... well... that's not something you can just "decide", boys.  You see, you need to actually 'have' the cash,  or 'have a partner' with cash.   You've got neither and you're already patting yourself on the back for your "decisive", "firm" actions.  

And from all I can see -- even if your so-called "plan" did work out, it looks like you're much more concerned with "financial stability" than "sustainable growth" which you haven't actually addressed at all.

BurningFuld's picture

Ah Financial Stability...music to the Bankers ear.

maxw3st's picture

I didn't see your post when I made mine. I see we both see the same lack of any substance to claims of dealing with the issue of growth. This isn't referring to any left-wing or socialist agenda. It's about generating the revenue stream to handle the interest payments on all the debt. There is no plan for stimulating growth anywhere in the "plan" as proposed to date. So far it has all been about covering banker'$ a$$e$ so they can lock in their bonuses.

Austerity measures and principle reductions ("haircuts") are great for stabilizing the banking system at this point in time. They do not however; address the ongoing problem of financing that debt. The Euro-zone is no better off than the US when it comes to unemployment. In fact the US is beginning to recover, but the Euro-zone, due to Trichet's interest rate hikes and austerity measures, is sliding backward when it comes to GDP. They are headed for recession. All the refinancing measures addressed to date do not address the issue of growth at all (other than to assure it will decrease).

To top it off, Merkel, et.al., seem to be determined to keep their currency some 30% overvalued. This is another effort that severely undermines any prospects of growth of either exports or tourism - two of Europe's major potential sources of increasing revenue. Talk about cutting off your nose to spite your face! Personally, I will remain short the Euro vs. the USD. I was only expecting a return to a more normalized 1.20 or so, but current behavior by ECB and EMU officials is beginning to make it look like zero bid is a distinct possibility.

Hansel's picture

Printing currency everyday would lead to sustainable growth and they would 'have' the cash.  Is that what you are recommending?

HD's picture

Once I built a railroad...

Zero Govt's picture

...and that was bankrupt too

Rail has been totally insolvent for 100 years ...only economic retards dumb (and corrupt enough) to prop up Rails bankrupt business model is, yes you've guessed it, politicians

not content with that red-ink sink hole the morons then added nuclear energy, green energy, electric cars, garbage incenerators and the Olympic Games to their investment portofio of totally insolvent garbage

how do politicians always end up totally bankrupt and in the sewer? ...any ideas!

Eally Ucked's picture

Obviously you don't know what is the rail. My advice for you is to go to Europe and use it. Eurostar for example with 2hr. travel from London to Paris. Do you think building rail track is more expensive than highway per mile, or maybe maintenance cost are lower for highways? Is it much more economical to use trucks to ship your stuff over thousands of miles? Is oil that cheap?

Freddie's picture

Rail works in the US because it is mostly free market.  Passenger in the US does not work.  Who knows how much European rail loses.  It can work better because cities are closer. UK rail by and large is shit. Liberal facists want more passenger rail in the US because it would mean more union jobs and ticket conductors making $150,000.

Eally Ucked's picture

Travel from Toronto to Montreal (650km) takes close 6 hr and 450$, London -Paris 2hr10min for distance similar to it and 160$. Beside that train is leaving station every 1hr, so you can choose the most convenient for you. You can go shopping or to visit your favorite restaurant, if you wish, and go home. Trains are full so I don't see that they losing any money on that business. You can buy also cheap Europass for all trains in EU and travel where ever you want and when you want. Try to do it using your car and compare your costs. Of course they have much better city transport, and much cheaper too so you can get everywhere in the city in no time. Just try it.

breezer1's picture

"i'll pay you tuesday for a hamburger today".

Quintus's picture

I'll gladly pay you Tuesday for a Trillion Euros today....

Segestan's picture

Socialist..... always attempting to build on a dream , a promise and a prayer. You would think Europeans would have figured it out by now , but just look at Asia Minor , the craddle of higher civilization itself, and it's a shit hole. Maybe this all has to do with people and not numbers?

XitSam's picture

"8) Improving global governance. Finally, we look forward to discussing the report on global governance by Prime Minister David Cameron."

Excuse me? I am in a G20 country, our stuff is screwed up as it is, we don't need no global governance. Does the rest of the world minus the G20 have any say in this global governance?

Segestan's picture

It's all kinda like Gods work.... you just have to have faith that you're leaders are working for you. You know... pretend.

Fips_OnTheSpot's picture

Kick the can, until pressure is so high, ESM can be ratified. Which will give _ANY_ financial souverignity just to non-elected assholes in Bruxelles. Including full immunity for housings and people within ESM. Dicatorship coming thru.

Schmuck Raker's picture

Europe needs money ?!?! This is a job for...

SUPER COMMITTEE !!

[da-da-daaa]

slewie the pi-rat's picture

nice avatar 4 a beltway babee

i'm sorry, the super communists, er, committee is running a bit behind schedule.  aversion to cutting pork, same as europe, especially for goobermint "employees".  too little, too late, blahblahblah...

if the G20 can't handle this trifle, fuk europe!

maxw3st's picture
Notice that, even under the section referring to the restoration of growth, nothing is detailed, anywhere in the letter, that specifically addresses actions to be taken that will stimulate growth. Zerohedge is precisely correct in referring to all this as the continuation of a Ponzi scheme at the central bank level.
Rainman's picture

The oligarchs survive by turning bullshit into a common currency.

And speaking of oligarchs, Der Spiegel's Schulz knocks it out of the park in defining America's Second Gilded Age.

http://www.spiegel.de/international/spiegel/0,1518,793896,00.html

Global Hunter's picture

My common responsibility and purpose is to my family and home, it is definately not banks and their equally stupid and dangerous ponzi scheme.  These guys need to be jailed.  

broke433's picture

This is indeed bullish until Italy's next auction.