G20 averts repeat of 2008 crisis, Spanish leader says

Seoul, Agency
Spanish Prime Minister Jose Luis Rodriguez Zapatero praised Friday the reform of the international financial system approved at the G20 summit here and said it would prevent another crisis like that of 2008. Zapatero gave a press conference in Seoul to weigh the results of the summit, and said that the fact that Spain has consolidated its participation in the G20 "is the most important foreign-policy achievement for our country in the last decade."

Together with the new regulations for financial organizations, the Basel III accord, which sets new capital requirements to prevent future crises, he stressed the reform of the International Monetary Fund, in which Spain has gained influence in the organization by increasing its quota of IMF capital to 2 percent.

Zapatero was not, however, equally satisfied with the agreement reached to avoid the competitive devaluation of currencies. In his opinion, there is "a lot of work ahead" to achieve real cooperation in currency policies.

Without mentioning either China or the United States, Zapatero said that some currencies are "clearly undervalued" and there are some countries that would have to avoid the temptations of protectionism to compete with them.

Nonetheless, he favored "not pointing the finger at anyone," since all countries have at some time used their currencies to win short-term advantages.

He also said that concern about unemployment was a feature of practically all the summit debates.

As an example he mentioned the G20 plan to extend free trade and finally conclude the Doha round of global trade negotiations, a step forward that would favor exports and would have a "decisive" effect on job creation.

France will assume the next G20 presidency, and Zapatero asked French President Nicolas Sarkozy to call a summit of labor ministers to tackle the problem of jobs and create policies to fight against unemployment, "the most serious social problem" to be inflicted by the crisis.

The difficult situation of Ireland was also part of the Seoul debates, and Spanish Economy Minister Elena Salgado signed with her colleagues from France, Britain, Italy and Germany a joint document to try and create confidence in the markets.

Though the crisis can raise the risk premium on Spain's sovereign debt, Zapatero insisted on the "solidity, solvency and trustworthiness" of the Spanish economy.