Rich countries accused of blocking financial reform

Financial crisis: European countries block reform at the UN As the World's countries meet in New York to discuss a way out of the financial crisis, rich countries have blocked progressive reform of the financial system put forward by more than 130 poor countries. 'The financial and economic mess we are in was created by inadequate regulations in rich countries, yet the poorest are suffering first and worst.' said Jesse Griffiths, from the Bretton Woods Project. Better regulation is urgently needed for the most vulnerable in poor countries. 'The EU have consistently blocked any reform in the UN that might prevent this kind of crisis happening again. They hid behind the excuse that the UN conference should urgently mitigate the impacts of the crisis. 'In practice the EU has delivered no new money to the poorest countries and has attempted to derail a once in a lifetime opportunity to address some of the systemic issues which caused the crisis.' said Nuria Molina, Policy Expert at EURODAD. UN conference raises critical issues Reforms supported by the world's poorest countries, proposed in a report by a commission of experts chaired by Nobel Laureate Prof. Joseph Stiglitz included an independent court to address debt crises, a new global reserve system to ensure greater stability of world currencies, and measures to counter international tax evasion. 'Groups in the Global South are concerned that the $1trn promised by the G20 will result in a $1trn debt crisis. However, the conference has failed to make commitments on further debt cancelation.' said EURODAD's Nuria Molina. “Special Drawing Rights (SDRs), the IMF’s reserve assets, provide condition-free resources at low cost. They are the quickest, cheapest way to mobilize resources to protect people in developing countries from the worst impacts of the crisis,” said Soren Ambrose, from ActionAid Tax is essential to ensure the poorest countries can raise their own resources. 'Corporate tax evasion costs developing countries more than the global aid budget. The UN Tax Committee is the best forum to deal with international tax evasion. The failure to decisively upgrade this committee is a missed opportunity.' said Dr David McNair, Tax Policy Officer at Christian Aid in the UK. The conference has acknowledged what has gone wrong but failed to give the UN the mandate to deal with the crisis. The contrast between the analysis of the problem and weakness in the response is striking. For the first time, the group of 130 poorest countries spoke with a unified voice on the need for systemic reform through the UN system, but rich countries are only concerned with preserving their fading power on the international scene. A new approach, focused on the whole world economy required. That change can only come from the UN, not a self-selected, exclusive grouping like the G8 or G20. ENDS Note: The United Nations Conference on the World Financial Crisis and its Impact on Development, New York (24-26 June) was convened by the President of the UN General Assembly, Rev. Manuel D'Escoto Brockmann to discuss the implications of the crisis on the poorest countries.

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