Joint Press Release: Federal Chancellor Merkel, OECD, IMF, World Bank, ILO and WTO on international economic policy cooperation
Joint press release by Federal Chancellor Angela Merkel, OECD Secretary-General Angel Gurría, IMF Managing Director Christine Lagarde, World Bank Group President Jim Yong Kim, ILO Director-General Guy Ryder and WTO Director-General Roberto Azevêdo on the occasion of their meeting on 13 May 2014 in Berlin.
Global activity has broadly strengthened, but is still far from a robust and sustainable growth path. Considerable risks of various kinds remain. According to IMF forecasts, the world economy is to grow by 3.6 percent in 2014 and 3.9 percent in 2015. The WTO forecasts a modest recovery of global trade of 4.7% in 2014 and a slightly faster rate of growth of 5.3% in 2015. Financial markets, investors and households have built up some new confidence. However, very high unemployment, a sizeable output gap, low investment, widening inequality, and a slowdown in emerging economies are still exerting an impact on growth prospects. Debt levels in most industrialized countries are still too high, at the government, company and household level. Tackling unsatisfactory labour market performance in many countries remains a fundamental challenge.
Governments therefore have to carry on their efforts to ensure growth and that fiscal consolidation is sustained and carried out at an appropriate pace. They also must continue to design and to implement structural reforms. Important measures have been brought forward to strengthen the stability, competitiveness and public finances of the European Monetary Union and its member states, but further efforts in this regard have to be made. The United States has made progress in consolidating its budget, but still is suffering from high debt levels, which calls for a credible medium-term fiscal plan. Emerging economies, some of which have suffered from severe challenges recently, have to continue their strategies of securing a sustainable growth path, especially in improving the adaptability towards external shocks and accelerating structural reforms, thereby reducing poverty.
On the whole, our common approach of international economic policy cooperation has mitigated the crisis’ consequences and fostered new growth prospects. Institutional linkages between national governments, international organizations and other stakeholders have been strengthened in the course of this process. We welcome the ongoing cooperation between the IMF, the World Bank Group, the ILO, the OECD and the WTO in particular in the following areas:
1. Structural measures aiming at boosting innovation, improving education, strengthening competition, narrowing social divides and reforming health systems and labour markets remain on the agenda of both advanced and emerging economies. By implementing such a reform agenda, growth potential will be enhanced, new employment generated, fiscal consolidation supported and social and economic inequalities reduced to allow for a more inclusive growth path. In particular, we welcome the efforts several Euro Area countries have made and are still undertaking to enhance their competitiveness and to consolidate their budgets. Investor confidence in Euro Area countries has improved. Nevertheless, further efforts, especially with respect to youth employment generation, structural reform and growth friendly consolidation, are urgently needed across all Euro area member states.
2. Sound macroeconomic policies have to go hand in hand with efforts to increase employment, drawing on the ILO’s Decent Work Agenda and on its Global Jobs Pact approach adopted at the ILO International Labour Conference of 2009, as well as the OECD Youth Action Plan and OECD Gender Initiative. In particular, strategies and immediate action both at national and international level to reduce youth unemployment have to be implemented with high political priority. The target is to create good and safe work conditions, real prospects and the individual chance for vocational education. We welcome the resolution the ILO adopted at its 101st International Labour Conference in June 2012 calling for immediate, targeted and renewed action to tackle youth unemployment.
3. Reducing barriers to international trade remains a major challenge to enhance global growth, development and employment. We welcome that the WTO Ministerial Conference in Bali in December 2013 succeeded in agreeing on a considerable reform package including trade
facilitation. We welcome the increased momentum this has provided to put a work program in place by the end of this year to advance the Doha Round. While multilateral trade opening remains the best way to ensure fair competition, prevent trade distortions and create new market opportunities on a global scale, especially for developing countries, we also welcome ongoing efforts to conclude new bilateral and regional free trade agreements which can be an important building block towards multilateral outcomes.
4. Climate change and the protection of natural resources remain key challenges of our time. These challenges could also become an opportunity for growth and the creation of good jobs. The potential for low carbon development and green growth needs to be realized by targeted action in developed and developing countries and by undertaking efforts to ensure resilience to climate impacts. All international organizations are committed to combating climate change and promoting green growth and to this end cooperating within their mandates. We are working towards a successful outcome of UNFCCC negotiations for a new ambitious climate agreement by 2015, which includes legally binding commitments and enhanced action to limit the rise in global temperature to less than 2 degree Celsius.
5. The development of an overarching Post-2015 Agenda provides a unique opportunity to reinforce the commitment to end extreme poverty by 2030 and to build sustainable development. The central challenge is to draw up an actionable Agenda that integrates the three dimensions of sustainable development: economic, social and environmental. The central aim of the Post-2015 Agenda for sustainable development should be to improve the living conditions for all people worldwide and to protect the natural resource base and the earth's systems, which provide the basis of our living also for future generations. We will support the elaboration of this ambitious agenda in the United Nations. This will require strong political commitment and determined action at all levels and by all stakeholders.