European Central Bank Executive Board member Joerg Asmussen said the Group of 20 must change the way it operates to enhance international cooperation.
“The G-20 lacks clear leadership” and “suffers from a lack of legitimacy,” Asmussen said in a speech in Berlin today. “The G-20’s promising start has unfortunately been followed by more mixed results.”
The G-20 took on greater prominence in 2008 when leaders began to attend meetings in response to the global financial crisis. With a broader membership encompassing emerging economies, it challenged the Group of Seven, which was set up in the 1970s after the collapse of the Bretton Woods system, as the preeminent global decision-making forum.
At a G-20 summit in Pittsburgh in September 2009, leaders committed to a global framework for economic growth, as well as to overhauling financial regulation to prevent future banking crises.
“The G-20’s promising start has unfortunately been followed by more mixed results,” Asmussen said. “This loss of momentum is to an important extent due to a waning sense of urgency.”
Asmussen said the group should increase the accountability and transparency of its decision-making process, adopt a “more focused and concise and operational agenda” and enhance its legitimacy by involving international financial institutions and current non-members in discussions about individual issues.
“Despite its limitations, the G-20 remains an essential instrument for global economic cooperation,” he said. “There is no viable or obvious alternative.”