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Frankfurt am Main | 01.12.2016

Main priorities of the German G20 presidency

Germany has assumed the presidency of the Group of Twenty (G20) until the end of November 2017. This informal union, comprising the 19 most important industrial countries and emerging markets and the European Union, is the major forum for informal international cooperation. The tasks of the presidency include setting thematic priorities as well as organising the G20 meetings.

Three pillars

The agenda of the German G20 presidency is orientated towards three thematic pillars: building resilience, improving sustainability, and assuming responsibility. Within this context, Germany has set three main priorities for discussions between finance ministers and central bank governors.

  1. Enhancing economic resilience
  2. Shaping digitalisation
  3. Improving investment conditions: partnership with Africa

In addition to this, Germany will continue the work done by the preceding Chinese presidency. The aims include encouraging innovative growth forces and continuing to strengthen the international financial architecture. These topics will be on the agenda both at meetings between G20 finance ministers and central bank governors and in the G20 working groups. In addition, conferences will provide a forum for background analysis and exchanges of views between academics, practitioners and official bodies.

Strengthening resilience

One priority of the German presidency is to strengthen the resilience of individual national economies and of the global economy as a whole. Particularly important for this goal are a national economic policy which is orientated towards strengthening resistance to shocks, as well as a regulatory setting which ensures properly functioning financial markets and stable financial institutions. Working together in the G20 can help us to address these challenges.

It is also important to define principles in other areas which strengthen the resistance of national economies to domestic and international shocks. The German presidency considers sustainable and transparent public debt to be important in this context. One of the challenges is to reduce feedback effects between public and private debts. Beyond this, the agenda includes strengthening international cooperation in taxation issues and discussions on how to strengthen the international financial architecture. This involves, in particular, the design of the global financial safety net and of the IMF's instruments for financial aid as well as rules on government measures to influence capital flows.

Shaping digitalisation

Digitalisation opens up new opportunities in the financial sector too, for innovative procedures and business models, which are often described as "fintechs". Within the agenda of shaping digitalisation, the German G20 presidency wants to explore the potential of this development. This includes the question of how such innovations support financial inclusion, but also their possible effects on financial stability. One aim of the German G20 presidency is to take the first steps towards a secure regulatory setting, in which the benefits of the new digital possibilities can be fully explored without neglecting the potential risks to the stability of financial systems.

Improving investment conditions

Also on the agenda of the German G20 presidency is a deeper partnership with Africa. On this topic, the G20 will address opportunities for sustainable economic growth, with the emphasis on good conditions for private investment in Africa. Remittances, ie money foreign workers send back to their home countries, should also play a role. These payments make a significant contribution to domestic demand in many developing countries. The G20 is, therefore, concerned with how remittances can be organised smoothly and efficiently without softening standards on combatting money laundering and terrorist financing.

Ongoing topics

As well as the above-mentioned focal points, the G20 under the German presidency will also tackle ongoing topics which were already on the agenda during the Chinese G20 presidency. These include discussions about the development of the world economy and strategies for strong, sustainable and balanced growth, further strengthening of the international financial architecture and of global financial safety nets, as well as completing various regulatory projects and building a framework for the Financial Stability Board to measure the impact of existing regulatory reforms in the financial sector. On the subject of climate risk and "green finance", the focus will be on risk analysis for financial instruments and economic units and on use of data for risk management. Better hedging of the financial sector against the risks of cyber attacks will also be a topic under discussion. A further project is the initiative for remedying data gaps, which aims to improve the use of existing microdata by the G20 states for a broad spectrum of analytical purposes. In addition, there are plans to promote the development of a continually updated database of macroprudential measures. This will be used to analyse transnational spillover effects and encourage the exchange of views on such measures.

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