Parliamentary Conference on the Global Economic Crisis

Geneva, 7-8 May 2009

TALKING POINTS

Senator Ovidius Mărcuţianu

Romania

I will begin by congratulating the Inter-Parliamentary Union for convening this conference. We welcome the opportunity to interact with colleagues from all over the world and with officials of entities that are key in addressing the current economic and financial crisis.

The role of parliaments is all the more important in these times. While the main responsibility to find solutions is incumbent upon governments, parliaments, through representatives of all political parties, have to participate in the process. Effective, truly inclusive measures require a broad political consensus, involving both majority and opposition groups.

Parliamentarians must also fulfill their role of giving legitimacy to and securing public understanding and support for the difficult decisions in response to the crisis. This means that transparency and an enhanced dialogue with the citizens are vital. And so are legislative support to and parliamentary scrutiny of recovery actions.

Also, since by their very nature parliaments are the institutions the most representative of the people, our primary concern should be the human and social dimensions of the crisis.

I believe it is important to learn certain lessons from the causes of the crisis. Some may be of general relevance, while other may apply to specific categories of economies, such as the emergent ones, like in Romania.

One lesson to be learnt is that regulation and supervision periodically lag behind markets. The G-20 Declaration of 2 April 2009 is reflective of this when saying that – and I cite – “Regulators and supervisors must […] support competition and dynamism, and keep pace with innovation in the marketplace”. I wonder if this statement might be seen as recognition of the fact that the current financial crisis is due less to market failures, but rather to the incapacity of supervision and regulation institutions to adapt to the realities and innovations in the market.

Another important lesson is that crisis management mechanisms must be reviewed and updated periodically. During times of prosperity, we tend to forget that a crisis may occur. And when it does, we may find out that legislative provisions in place do not allow for a rapid reaction, or that the difference from one country to another in terms of procedures and instruments hinder cooperation.    

I would also appreciate your comments on a recommendation put forward by the Commission of Experts of the President of the UN General Assembly on reforms of the monetary and financial system, namely the proposal to set up a Global Economic Coordination Council to assess developments and provide leadership in economic, social and ecologic issues. The Council would, according to the Experts, provide a democratically representative alternative to the G-20.

The economic crisis has created impetus for reforming the international financial architecture. We welcome the G-20 pledge to reform and modernize the international financial institutions (IFIs) so as to strengthen their longer term relevance, effectiveness, and legitimacy.

But the IFIs are integral part of an international cooperation network dealing with a variety of development issues, from post-conflict rebuilding to energy security and climate change. For this reason, the financial reform can be an opportunity for a wider renewal of key international organizations and for improving institutional cooperation among them.

We share the view that the crisis is an opportunity to reform global economic and financial governance, according to the principles of democracy, transparency and accountability.