By Sarah de Sainte Croix, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – President Dilma Rousseff has called the recent G20 Summit in France a “relative success.” At a press conference in Cannes, she said, “It hasn’t been a complete success, but a relative success, because the eurozone countries have taken a step forward in deciding how to face the crisis. [However] I don’t believe that a meeting can resolve the world’s problems.”
The issue of the crisis in the eurozone dominated discussions at the meeting, which came to a close on Friday. According to the Brazilian President, all of the participating delegates were concerned about the financial problems facing Europe.
She affirmed this position at the India, Brazil and South Africa (IBSA) Summit last month, where she urged leaders to “Prevent the crisis spilling over into a global one.”
At the lunch of the Heads of State and Government Leaders at the opening of the G20 Summit on Thursday, she advised that priorities for resolving the crisis must be “leadership, clear vision and speed.” However, by the close of play on Friday she conceded that “The Europeans need more time to decide on their own measures.”
During the summit, Rousseff reaffirmed that Brazil would continue to consider providing financial assistance to Europe on the condition that more details were provided about the implementation of the rescue package.
However, she made it clear that this would not be via direct seeding – but through The International Monetary Fund (IMF) instead, saying, “I don’t have the slightest intention of making any direct contribution to the European Stabilization Fund. Brazil has a mechanism, which is the mechanism that governs international relations, via the Internal Monetary Fund.”
Rousseff also confirmed that Brazil would “not oppose” a tax on international financial transactions, known as ‘The Robin Hood Tax,’ which France was keen to support.
The revenue from the tax, which could amount to hundreds of billions of dollars a year, would be used to reduce the deficit of the most problematic of the developed countries, and to help fund development and climate change strategies in lower income countries at a time when fiscal deficits are threatening international aid flows.
One of the goals of the tax was to ensure a minimum global level of income security as specified by the International Labor Organization (ILO), not only for humanitarian reasons, but also to safeguard a minimum level of consumer activity in order to help stabilize global economies.
Rousseff confirmed her support for the theory, recalling the positive socio-economic effects of Brazil’s recent experience of elevating around forty million people into the middle class and to consumer status, saying that supporting the ILO’s income floor is, “Not philanthropy, it’s vital safety net to address the global crisis and which has an unequivocal effect [on economies].”
However, the financial transactions tax met with opposition from the U.S. and the U.K. and it remains to be seen whether or not it will go ahead.
There have been criticisms that the Cannes Action Plan, which summarizes the decisions made during the summit and the action points decided upon for the future, falls short in terms of concrete decisions and ways forward.
On Brazil’s behalf, Rousseff pledged to increase investment in infrastructure and to take “discretionary measures” to support domestic demand, should the crisis significantly worsen.