FROM THE OFFICE OF PUBLIC AFFAIRS

November 21, 2004
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The Honorable John W. Snow
Conclusion of Meeting of G-20 Finance Ministers
and Central Bank Governors
Berlin, Germany
Sunday, November 21, 2004

I am very pleased to be here in Berlin and to have participated in such a productive discussion with my fellow Finance Ministers, as well as Central Bank Governors from the industrial and emerging market economies of the Group of 20. I want to thank Minister Eichel and Governor

Weber for hosting us and for leading the G-20 over the course of this year. I also want to thank Minister Eichel for our work together to reduce substantially Iraq's debt. This will ensure that the Iraqi people will have the opportunity to rebuild their economy.

 This meeting caps a full week that I have spent in Europe, discussing the importance of economic growth with leaders of government, finance and academia. Growth was also a major theme of our meeting here. The world economy is growing faster than it has in nearly thirty years. With interest rates and inflation still low, conditions are ripe for strong growth to continue. In emerging market and developing countries, economic growth is expected to top six percent this year.

The United States is leading the global growth surge. Thanks to President Bush's pro-growth policies and sound monetary policy by the Fed, the economy is on a solid expansion path. GDP growth is strong. In 2004 alone our economy has created 2 million new jobs.

Sustaining this strong global growth requires all of us to act. Addressing global imbalances in particular is a shared challenge. The United States needs to do its part by raising national saving and reducing its budget deficit. President Bush is committed to cutting the budget deficit in half over the next four years. We will do this with spending restraint and continued growth - encouraged by pro-growth policies - in our economy.

Growth among our trading partners - including those here in Europe - also needs to increase and that requires addressing structural barriers that stand in the way of better performance. In Asia, more flexible exchange rates are needed in countries that do not have such flexibility.

We released today a G-20 Accord for Sustainable Growth, which describes our shared understanding of the economic policies needed for economic growth. This Accord reflects broad agreement that the world economy is best served by open, competitive markets, free capital flows and free trade. As part of the G-20 Accord we issued a Reform Agenda for Sustained Growth to set out specific policies being implemented in each of our countries. The G-20 Accord and Reform Agenda for Sustained Growth build on the path breaking G-7 Agenda for Growth initiative. I am gratified to see broad endorsement of a stronger focus on the policies that lead to economic growth.

The G-20 also reviewed the role of strong domestic financial sectors in supporting economic growth and reducing vulnerabilities. The review highlighted the importance of promoting financial intermediation and competition, implementing international standards and codes, and effective financial sector supervision and regulation. I also want to underscore the vital role remittances play as well in both sending and receiving countries.

Looking beyond our own domestic policies, we all recognize the importance of robust and effective international institutions to advance growth. In recognition of the 60th anniversary of the Bretton Woods institutions, we discussed today the recent progress made in modernizing these institutions and the need for further reforms. I was pleased to share with the G-20 some of the conclusions of the G-7 Strategic Review that was conducted under the U.S. chairmanship this year. I believe that it is particularly worthwhile for members of the G-20, with their diverse perspectives, to reflect together on how these institutions are working and how they can do better.

For the international financial system to operate effectively, it is important to have clarity and predictability. I welcome the results achieved by emerging market issuers and creditors in their "Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets." We hope that issuers and creditors will find the principles useful, and we encourage continued dialogue.

Finally, I want to note that the G-20 has played an important role in the financial fight against terror. We look forward to this work continuing. We all welcomed the new FATF standard calling on countries to take measures to prevent terrorists from transferring cash across borders. We are also delighted by the stepped up role that the IMF and World Bank have begun playing this year in assessments of the FATF standards.

Thank you.

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