Tagged: FinancialServices

Magdy Martínez-Solimán: Statement at the Policy Symposium on “Financing Asia’s Future Growth”

06 Apr 2015

Ambassador Mr.  Abulkalam Abdul Momen (PR of Bangladesh to the UN),

Ambassador Mr. Mr. Durga Prasad Bhattarai (PR of Nepal to the UN),

Ambassador Mr. Desra Percaya (PR of Indonesia to the UN) (TBC),

Mr. Lenni Montiel, Assistant Secretary-General for Economic Development, UN DESA

Mr. Shang-Jin Wei, Chief Economist, Asian Development Bank

It is my great pleasure to welcome you to this seminar on “Financing Asia’s Future Growth”. This symposium is timely and important. Timely because the third International Conference on Financing for Development, to be held in Addis Ababa, Ethiopia, in July 2015 is a historic opportunity for the international community to agree on an ambitious framework for the post-MDG era. It is also important because of the ongoing inter-governmental discussions both on FfD and on post-2015 development agenda.

I bring you warm greetings from Haoliang Xu, UNDP Regional Director for Asia and the Pacific. Mr. Xu sends his sincere and heartfelt apologies for not being able to be with you today. I am grateful for his invitation to Chair this Symposium.

I am especially pleased that this event is being jointly hosted between UNDP and the Asian Development Bank (ADB). This year’s Asian Development Outlook (ADO) will give us a reference to guide our discussions. The ADO is ADB’s flagship annual economic report, analyzing trends in and proposing forecasts for the Asia-Pacific region. ADO is smart and influential  also inside the UN’s development community and beyond.

Excellencies, distinguished delegates, Ladies and Gentlemen,

This year’s ADO has as its special theme “Financing Asia’s Future Growth.” The way in which the report approaches the challenge of financing is refreshing and extremely relevant for the broader discussion around finance for development.

In the MDG-era, financing was often conceived as tallying up the resources available from different sources (mobilized domestically as well as international private flows, ranging from FDI to remittances) available to developing countries to meet the MDGs, with the gap being filled with Official Development Assistance (ODA). Over the last 15 years, estimates abounded of the billions in ODA that would be required to meet the MDGs.

It is clear that this “gap-filling” approach is insufficient as we confront the implementation of the post-2015 agenda. The universality and broad breadth of the new agenda (from poverty eradication, to economics lifestyle changes towards sustainable patterns of production and consumption, to promoting peaceful and inclusive societies) imply that estimating gaps – which is only partially possible – will inevitable take us to amounts in the trillions of dollars. We need to think anew about how we approach the challenge of financing development. And we need to think big.

While doing so, I want to emphasize the continued importance – and value – of development aid. The Addis Ababa conference represents an opportunity for donor countries to reaffirm their longstanding commitment to allocate 0.7% of GNI to ODA as well as pledge to allocate at least 0.15-0.2% of GNI to the LDCs or more. The current draft of the Addis Ababa outcome document being considered even suggests that countries agree to meet these targets by 2020. But the post-2015 agenda cannot be achieved through aid alone. There is a need to consider other forms of international public finance for investments in communicable disease control, climate change adaptation and mitigation, science, innovation and new technologies. More public resources for climate finance are needed, but these should not come at the expense of ODA.

Even lumped together, all sources of public finance will not suffice. We need to find the right convergence between policy driven and profit led sources of development finance. Incentives are needed to ensure that private investment decisions move the world towards sustainable development aspirations. The progressive elimination of inefficient and ineffective subsidies could help to shift transportation and energy investments towards less fossil fuel intensive and more sustainable options, while releasing public resources for social and development purposes. The ADO argues that the current context of low world oil prices presents an opportunity in Asia for this type of fiscal reforms. In fact, the report shows that several countries in Asia are already seizing on this opportunity, either by reducing fossil fuel subsidies, increasing taxes on their use, or both. This is the type of policy action that sends the right incentives to people and businesses, while releasing public resources, that are important in the context of the new agenda.

Financing for development in the post-2015 era cannot be considered only in the context of ‘stable times’; there are fewer of them and we have to recognize that volatility is becoming the new normal. This is particularly relevant to Asia, a region especially vulnerable to extreme climate events. But there are many sources of risk beyond disasters, with the costs of shocks as diverse as conflict and disease outbreaks high and increasing.
And, of course, we continue to face recurrent economic crisis. Asia had a painful experience with a major financial crisis in 1997/1998. The ADO reminds us of the traumatic growth collapses that occurred in 1998: Indonesia’s economy contracted by 13 percent, the Republic of Korea’s by 6 percent, Malaysia’s by 7 percent, and Thailand by 11’s percent (from pre-crisis annual growth in excess of 7 percent in every country). The development setbacks were deep and long-lasting. But Asia also showed resilience and has put in place a range of policies to better protect countries from economic shocks. It has bounced back with energy. What we need to achieve sustainable development is for nations and communities to be resilient, not only to economic but to a wider set of shocks, so that they are able to anticipate, shape and adapt to the many shocks and challenges that can devour development gains. All development needs to be risk-informed.

Excellencies, distinguished delegates, Ladies and Gentlemen,

In this context, and without preempting the detailed presentation of the report and its special theme, I want to emphasize that the perspective taken in the ADO on how to finance Asia’s growth is particularly relevant. The challenge of financing is presented less as one of mobilizing resources (domestically or from abroad), and more as one of ensuring that the financial systems in Asia work to allocate savings to high-return and productive investments. This is the type of analysis that will enable us to think more broadly about financing, as a challenge of unlocking funding by pursuing policies that enable more efficient and effective resource allocation.

Excellencies, distinguished delegates, Ladies and Gentlemen,

Allow me, before I introduce our speakers, to elaborate briefly on the important of financing for the achievement of post 2015 as well as the importance of inclusive financial sector for the eradication of extreme poverty and reduction of inequality.

Today 2.5 billion adults – more than half of the world’s working adults – are excluded from formal financial services. This is most acute among low-income populations in developing countries, where approximately 80% of poor people do not have access. Access to well-functioning and efficient financial services can empower poor women and men. It is now well-established that giving low-income households access to formal financial services can help reduce poverty and inequality.

In the Pacific, financial inclusion is particularly challenging, where less than 10 percent of adults seem to have access to basic financial services. Challenging geography, poor infrastructure and the high costs associated with delivering services to sparse populations are barriers in this region. UNDP and UNCDF are therefore jointly implementing a Pacific-wide Financial Inclusion Programme (PFIP), which helps low-income households to gain access to quality and affordable savings, insurance, credit and other financial services and financial education. The programme, with funding from the Australian Government, the European Union and the New Zealand Government, also disburses grants to financial service providers. The programme aims to add one million Pacific Islanders to the formal financial sector by 2019 by spearheading policy and regulatory initiatives, facilitating access to appropriate financial services and delivery channels and by strengthening financial competencies and consumer empowerment.

As we consider the importance of financial systems to help finance the post-2015 agenda and the need to ensure financial inclusion, UNDP’s programme in the Pacific is an illustration of the comprehensive and inclusive development approaches that we will need to pursue to finance development.

Let me take a moment to introduce our guests here.

We have with us today, Mr. Shang-Jin Wei, ADB’s Chief Economist. Mr. Wei is a key spokesperson for ADB and oversees the Economics and Research Department. Mr. Wei previously served as Professor of Finance and Economics at Columbia University’s Graduate School of Business. Before joining Columbia University, he held senior positions at the IMF, at the Brookings Institution, and at Harvard University’s Kennedy School of Government.

Ambassador Mr. Abulkalam Abdul Momen, Permanent Representative of Bangladesh to the United Nations, New York, has been serving in this role since August 2009. Prior to that, he served as Chairman of the Department of Economics and Business Administration, Framingham State College. He also worked earlier in senior positions in the government of Bangladesh.

Ambassador Mr. Desra Percaya, Permanent Representative of Indonesia to the United Nations, New York, has been serving in this role since Feb 2012. Prior to this, Dr. Percaya was Indonesia’s Deputy Permanent Representative to the United Nations in Geneva. He has held a variety of posts related to multilateral diplomacy and international security since joining the Ministry of Foreign Affairs in 1986.

We have with us today Ambassador Mr. Durga Prasad Bhattarai, Permanent Representative of Nepal to the United Nations, New York. Prior to this, he served as the Permanent Secretary of Nepal’s Ministry of Foreign Affairs. A career diplomat, Mr. Bhattarai held senior posts in Nepal’s foreign service and government.

Finally, we have with us Mr. Lenni Montiel, the Assistant Secretary-General for Economic Development, at UN DESA. Prior to his appointment, Mr. Montiel was the Director for Economic and Social Affairs in the Executive Office of the Secretary-General, preceded by a distinguished career in development as a colleague of ours in UNDP.

Thank you.

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA,

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERET…

13/11/14

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you. 2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future. 3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly. Let me further congratulate you Madam Speaker on your own election.

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA, PRESIDENT OF THE REPUBLIC OF BOTSWANA, TO THE FIRST SESSION OF THE ELEVENTH PARLIAMENT – “MOVING BOTSWANA FORWARD”

 

INTRODUCTION

 

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you.

 

2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future.

 

3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly.  Let me further congratulate you Madam Speaker on your own election.

 

4. Today’s gathering is an outcome of our 11th consecutive general election. As is our tradition, the ballot was conducted in a peaceful, free and fair manner. For this we can once more thank Batswana in general, as well as the Independent Electoral Commission (IEC) and other individuals and organisations that helped to ensure the poll’s success.

 

5. In any democracy elections are the means to the greater end of forming a Government capable of translating the popular will into public service delivery. We who have the honour of sitting in this House are accountable to the hundreds of thousands who entrusted us with their votes. Although divided in their choices, the voters were united by a shared desire for a better future. It is, therefore, our responsibility to ensure that together we deliver that future by at all times putting the national interest before our own.

 

6. Last month my party, the Botswana Democratic Party, was re‐elected on the basis of a detailed manifesto that promised to secure our common future by building on our past achievements. Today, before this House I reaffirm our commitment to honour that pledge.

 

7. In as much as we recognise that a government of and by the people is not an event but a process; this administration shall continue to engage Batswana across the country about their concerns through various fora and media, from the venerable realm of dikgotla to the digital world of interactive online communication. It was as a result of wide-ranging consultation that our manifesto was predicated on what we understood to be our citizens’ core aspirations. These include achieving:

 

• Job creation for sustainable livelihoods and income generation;

• Food security through continued agricultural renewal;

• Expanded access to land and housing ownership;

• Access to world-class quality education that caters to current and future needs;

• Citizen, including youth, economic empowerment;

• Dignity for all through the eradication of poverty;

• Zero tolerance for corruption in all of its manifestations;

• Elimination of mother-to-child transmission of HIV; and

• Government reform that leverages on the application of new technologies. 

 

8. Each of these commitments is based on realistic analysis of where our country is and needs to go in order to meet the reasonable expectations of its people, while improving our global standing in an ever more competitive world. Taken together they are consistent with our broader vision of achieving inclusive sustainable development that upholds the dignity of all.

 

ECONOMIC OUTLOOK

 

9. Madam Speaker, owing to the prudent economic and financial management by my Government, the country was able to survive the 2008/09 global financial crisis and economic recession with minimum impact on the domestic economy. We were able to save jobs in both the public service and private sector, as well as continued to provide essential public services to our people.

 

10. Having successfully weathered the storm of the economic downturn, we can look forward to better days ahead, with economic growth buttressed by reduced inflation. These positive trends should allow us to revive some of our postponed projects, along with outstanding issues affecting the conditions of service among public employees. Our optimism is in part based on forecasts of continued, albeit still fragile, global economic recovery, with worldwide output projected to grow by 3.3% in 2014 and 3.8% in 2015.

 

11. Turning to the domestic economy, the gross domestic product (GDP) at current prices stood at P124 billion in 2013 and it is projected to expand to P136.5 billion in 2014. In real terms, the GDP grew by 5.8% in 2013, and is projected to grow by 5.2% in the current year, driven by both the mining and non-mining sectors.   Within the non-mining sector, retail and hospitality industries, as well as agriculture are experiencing growth.

 

12. Average national inflation continued to decline from 8.5% in 2011 to 7.5% in 2012 to 5.9% in 2013 and further to 4.5% in September 2014, which is well within the Bank of Botswana objective range of 3 to 6%. This positive trend gives us confidence in our ability to maintain a low inflation environment, which is necessary for domestic enterprises to compete in the global market.

 

13. In terms of our fiscal management, Government succeeded in restoring a balanced budget during 2012/13 financial year, after four years of budget deficits. For the 2013/14 financial year we were able to collect P 48.9 billion, up from the P 41.7 billion received in 2012/13, while total expenditures and net lending for 2013/14 amounted to P 41.73 billion. This resulted in a budget surplus of P7.2 billion, largely due to the good performance of the mineral sector. For 2014/15 a budget surplus of P1.3 billion is currently projected. These savings will allow us to reduce our debt burden and rebuild our financial reserves.

 

14. To sustain a positive balance sheet will, however, require expanded revenues. Here I can report that we were able to collect P48.9 billion in the 2013-14 financial year, up from the P41.7 billion received in 2012-13. The 2013/14 outturn for expenditure and net lending was P41.7 billion.

 

EMPLOYMENT

 

15.  Madam Speaker, to be meaningful to Batswana, economic growth has to be accompanied by expanded employment, which is why our manifesto listed job creation at the top of our aspirations. To reiterate what I said in my own message to the voters, of all our campaign promises tackling unemployment is the most important one. While there has been some progress in recent years, current estimates put unemployment among those 18 and above at just over 17%. Although this reflects a modest reduction since 2007, it has been insufficient to absorb all those seeking employment, especially among our talented youth. We can and shall do more.

 

16. Our Economic Diversification Drive (EDD) is a key instrument for job creation. Since its 2010 inception, EDD has been facilitating employment generating business opportunities by promoting the consumption of local products. While our immediate focus has been leveraging public procurement in support of domestic industries, as we move forward our emphasis will shift to developing greater internal capacity for export-led growth, while continuing to value local goods and services.

 

17.  So far a total of P13.3 billion worth of goods and services were recorded since the inception of the initiative. Out of this figure, the value of local manufacturers and service providers (EDD purchases) amounted to P590.5 million for 2010/2011, P1.8 billion for 2011/2012 and 2012/2013 and P2.3 billion for 2013/2014. Over one thousand enterprises have so far been registered under the EDD Programme, which has contributed to the employment of 28,000 Batswana.

 

18. We have already begun implementing our EDD Medium to Long Term Strategy, to develop sustainable sectors for economic growth and diversification. A leading example is the Leather Sub-sector Strategy, which is focused on the establishment of a Leather Park in Lobatse at a total cost of about P225 million. Government has agreed to finance the park’s primary infrastructure, a Common Effluent Treatment Plant, estimated to cost P102 million, while other components of the project will be financed through private sector investment.

 

19. Government had also budgeted over P20 million to provide temporary assistance for over 12 months to support 34 textile companies, employing 2,912 workers.

 

20. While the nurturing of SMMEs, support for existing industries and value addition remain critical in our achievement of job creation, we further anticipate that over the next few years local formal sector employment will be generated with the emergence of new economic opportunities through the synergies generated by the development growth nodes or clusters across the country.

 

21. In the Chobe region, for example, we anticipate an expansion of opportunities in tourism, construction, transport services and agriculture resulting from the construction of the road and rail bridge at Kazangula and phase one of the water pipeline to Pandamatenga, along with associated infrastructure. It is estimated that when completed these two mega-projects will create over 9000 permanent jobs.

 

22. Additional emerging labour intensive opportunities are already being generated in our urban areas, as reflected in Selebi-Phikwe’s development as a metallurgical hub, the continued growth of Gaborone as a global diamond as well as regional technical services centre, and Francistown’s growth as a nexus for trade and transport. We further anticipate additional jobs through synergies generated by new mining activities, the continued expansion of commercial agriculture and the development of Trans-Kgalagadi road and potential rail corridor.

 

COMPETITIVENESS    

 

23. A key to unlocking these job creation opportunities will be increasing our global competitiveness. To improve our competitiveness ranking in the area of goods market efficiency we have tightened our market monitoring for greater efficiency in the provision of goods and services, while the Competition Authority is reviewing mergers and potential cartel activity involving both local and foreign companies.

 

24. Madam Speaker, job creation is inevitably linked to investment. In this respect the latest FDI Intelligence report indicates that Global Greenfield FDI showed signs of recovery, increasing by an estimated 11% from 2012 to 2013. The increase in local investment has been even greater, with UNCTAD’s 2014 World Investment report showing Botswana having grown by 27% in 2013.

 

25.  The Botswana International Trade Centre (BITC) continues to promote our country as a competitive location for investment, making business contacts and generating leads. During the 2013-2014 financial year, BITC helped realise a total combined investment capital of just over 1 billion pula, of which P 642 million was from foreign direct investment (FDI) and P449 million came from new domestic investments. In 2012/13, BITC further recorded P1.9 billion worth of goods and services exported into the region and beyond, of which P738 million was attributable to financial and international business services by the financial services cluster.

 

26. Botswana was ranked number one in the 2014 Baseline Profitability Index, surpassing Hong Kong as a location for medium to long term returns on investment. In essence the Index suggests that investors can expect to do well here once they have established themselves in our market.

 

27. Government is, furthermore, working to limit the number of licenses and permits, while allowing mixed land use zoning, adopting risk based approach for Environmental Impact Assessments and Management Plans, and decentralising the management of electricity connections.

 

28.  Government has also embarked on a National Work Ethic programme to promote productivity. So far, 254 facilitators have been assessed to implement the programme, which commenced in May 2014.

 

29. The drafting of a Bill which will provide the legal framework for the establishment of Special Economic Zones and the Special Economic Zone Authority is being finalized.

 

30. The Rural Development Council (RDC) has been upgraded as the national consultative body to promote and coordinate the implementation of rural development policies and programmes. As a result community based projects such as the Zutshwa Salt Project and the Mogobane Irrigation Scheme, to mention some, have been resuscitated.

 

CITIZEN EMPOWERMENT

 

31. Madam Speaker, it is pleasing to note that to date, CEDA has funded 5,462 enterprises with a total value of nearly P8.55 billion, in the process creating over 48,935 thousand jobs.  During the 2013/14 financial year, CEDA assisted 151 new enterprises with a total monetary value of P152 million, collectively generating 1042 new jobs.

 

32. Since its inception, LEA has also facilitated the creation of 4995 new jobs, including 568 in the ongoing financial year. The Authority has further trained a total of 9,317 entrepreneurs. In an effort to inculcate an entrepreneurial culture, LEA embarked upon the Entrepreneurship Awareness Workshops among secondary school leavers, vocational trainees and prison inmates; over 26,000 of whom have been trained.

 

33. Madam Speaker, through the Botswana Bureau of Standards (BOBS), we have encouraged our small and medium enterprises to implement quality assurance activities within their businesses. Progress has been made in certification of goods especially in the building and construction industry. To further ensure that prescribed goods entering our borders comply with domestic standards, a BOBS office has been opened at the Tlokweng Border.

 

RULE OF LAW

 

34. Madam Speaker, adherence to the rule of law remains a cornerstone to our national development. It is thus encouraging that independent comparative surveys, as well as domestic polling, consistently place us among the best in the world as well as first in Africa in terms of our upholding the rule of law while ensuring the safety and security of all our citizens. These surveys include:

 

• 2014 Ibrahim Index of African Governance, where we ranked first in the category of safety and security;

• World Justice Project’s 2014 Rule of Law Index, where we were ranked 25th in the world as well as first in Africa;

• 2014 Global Peace Index where we were at 36th place, ranking above half of European countries surveyed;

• 2014 Legatum Index for Governance and Rule of Law, where we were ranked 28th in the world; and

• 2013 Global Democracy Index, where besides ranking 35 out of 167 countries we achieved a near perfect score in the area of civil liberties.

 

35.  In light of such reputable findings it is unfortunate to say the least that some individuals, working through foreign as well as domestic media, including rumour mongering on social media, have attempted to instil the perception of Batswana living in fear. This is in an apparent effort to undermine this country’s longstanding and shared record of peace, order and good Government.

 

36. While the mass circulation of false and malicious reports intended to incite undue alarm may be aimed at promoting the political agenda of some, it is at the collective cost of tarnishing the image of the country as a whole. It is also a threat to the economy we all must depend upon for our livelihoods. Such disinformation should therefore be rejected with contempt by all peace-loving Batswana. All citizens, residents and potential visitors to Botswana can be confident that this Government will continue to both abide and uphold the rule of law without fear or favour.

 

37. Let me, nonetheless, also observe that we have not, and shall not, allow past achievements or international accolades to breed complacency as we recognise that, here as elsewhere, criminal activity is constantly evolving and increasingly sophisticated. We therefore remain determined to pursue a zero tolerance approach to all forms of criminal activity, including corruption.

 

38. To counter emerging domestic and trans-national challenges the Police Service has deployed integrated law enforcement strategies to combat all forms of criminality and anti-social behaviour. This has involved an ongoing redirection of resources to deal with violent and intrusive, cross border and cyber based criminal activities.

 

39. Whilst total recorded crime excluding road traffic violations rose by 4.7% during the year 2013, significant reductions were, however, registered in respect of violent and intrusive crimes.  Offences in this category, which included burglary, store breaking, robbery, house breaking, threats to kill, murder, rape, motor vehicle and stock theft, declined by 15.4%.

 

40. Road traffic management poses an additional policing challenge. Analysis of road accidents shows a youth bias, expressed in reckless driving, often aggravated by the influence of alcohol. As a result of the increase in the intensity of road policing initiatives, the number of detected road traffic offences rose by 32.4%, while there was a corresponding decrease in the number of fatal road accidents by 2.6%.

 

41. Madam Speaker, the Department of Prisons and Rehabilitation continues to improve security in the prisons and rehabilitation of offenders. While overcrowding has been a problem in some of the Prison institutions, there has been substantial reduction in congestion since 2008. In June 2014 there were 3824 offenders held in prisons, which was 13% below the authorised holding capacity.

 

42. Madam Speaker, the internal and external challenges of today’s constantly changing security landscape, call for a structurally aligned, strategically focused and adequately resourced, as well as highly trained and motivated, defence force. The BDF will thus continue to evolve its structures and strategies to defend the nation, while continuing to provide assistance to other law enforcement agencies in combating crime, including poaching.

 

ACCESS TO JUSTICE

 

43. Madam Speaker, as was most recently demonstrated in the Judgments of the High Court and the Court of Appeal upholding the constitutionality of the Standing Orders of this very House, our Judiciary continues to independently and effectively deliver on its constitutional mandate of settling disputes, both large and small, without fear or favour.  This Government will, as always, respect decisions of the Courts and expects all citizens to do the same.  Equally, we must all display tolerance and recognize everyone’s right to approach the Courts for the resolution of any legal issue no matter how strongly we may disagree.

 

44. To improve everyday access to justice several special court projects like the stock theft, maintenance, traffic, small claims and most recently corruption court have been put in place so as to speed up and improve the case disposal rates, while promoting greater access to justice by simplifying court rules and processes to make them more user friendly.  In addition a Court Annexed Mediation will be in place by the end of the current financial year.  This f

Two Europes or One Europe?

European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Valedictory speech by President Barroso

European Parliament plenary session

Strasbourg, 21 October 2014

Mr President, Honourable Members,

First of all, I would like to thank you for the invitation to address this Parliament in what would be the last time I have this opportunity. In fact, we are coming to the end of my second mandate as the President of the European Commission and I am very happy to be here with you and my colleagues to present to you our bilan, since this is my second Commission, I think I can also refer to the last ten years.

I want to share with you my feelings, my emotions, what I think about the way the European Union has responded to these very challenging times and what I think are the most important challenges for the future.

I think you can agree with me that these have been exceptional and challenging times. Ten years of crisis, and response of the European Union to this crisis. Not only the financial and sovereignty debt crisis – let’s not forget at the beginning of my first mandate we had a constitutional crisis, when two founding members of the European Union rejected, in referenda, the Constitutional Treaty. So we had a constitutional crisis, we had a sovereign debt and financial crisis, and in the most acute terms we now have a geopolitical crisis, as a result of the conflict between Russia and Ukraine.

The constitutional crisis that we had was in fact solved through the Lisbon Constitutional Treaty. The reality is that at that time, many people were saying that it would be impossible for the European Union to find a new institutional setting. And in fact there were moments of ambiguity and doubt. But basically, we could keep most of the acquis of the European Union, including most of the new elements of the Lisbon Constitutional Treaty, which was ratified by all Member States including those that today seem to have forgotten that they have ratified the Lisbon Treaty.

More recently – because I learned to leave to the end the economic issues because they are still with us – we had this very serious challenge and threat to our stability, in Europe, coming from the unacceptable behaviour of Russia regarding Ukraine. And we took a principled position. We offered Ukraine an association agreement and a free trade agreement and I am happy that, in spite of all the difficulties, Ukraine was there, signing and ratifying the association agreement, and I want to congratulate this Parliament, because the same day at the same hour the Parliament in Ukraine was ratifying this agreement, you were also ratifying the agreement showing you can offer hope to Ukraine as part of the European family of nations.

At the moment I am speaking to you, this crisis is not yet solved – we know that. But I think we can be proud that we have kept a position of principle, that we have condemned in the most unequivocal terms the actions of Russia and that in fact an association agreement was ratified, not only with Ukraine, but also with Georgia and Moldova because I believe we have a duty to those countries that are looking to Europe with their spirit and their hope to share with us the same future and because they want to share with us the same values.

At this moment we are still mediating and, today, there is a meeting mediated by the Commission on energy with the Russian government and the Ukrainian government, so a political negotiated solution is possible, we are working for that. It is in the interest of all the parties to have a political agreement, but a political agreement that respects the principles of international law, a political agreement that respects the right of country that is our neighbour to decide its own future and a political agreement that respects the sovereignty, the independence of that country. So, we should be proud of what we have been doing in this very challenging geopolitical crisis.

And we also had the financial and sovereign debt crisis. The reality is that the crisis was not born in Europe, but the fact is that because we were not prepared, because the Euro-area had not yet the instruments, we were very much affected by it – not only in financial terms, in economic terms, in social terms and in political terms. I think this crisis was probably the biggest since the beginning of the European integration process in the 50s of the last century. Let’s now put things into perspective.

Dear Members of Parliament,

Let’s remind ourselves what was the main opinion of most analysts in the economic and financial media, or even many of our countries or outside of Europe, about what could happen: everybody was predicting Greek exit, Greece exiting the Euro, and, of course, Greece exiting Euro would certainly, immediately have had a cascading effect in other countries, a domino effect that was indeed already felt in countries such as Ireland or Portugal. But let’s not forget, Spain was also under very heavy pressure, and Italy. We were staring into the abyss. I remember well what happened in discussions in the margins of G20 in Cannes in 2011, I remember well when analysts were predicting with almost unanimity a Greek exit and at least 50% of them were predicting the implosion of the Euro. And what happened? Not only was there no exit of the Euro, now we are to welcome the 19th member of the Euro, Lithuania will join us in the 1st of January 2015. And not only did Greece not leave the Euro area, it has enlarged and the European Union has been enlarging as well. This is a point that has been very much underestimated in our analysis.

2004, the year I had the pleasure and the honour to assume the leadership of the European Commission, do you remember that we were 15? Today, we have 28 countries. So we have almost doubled the membership of the European Union during this crisis. Is there a better proof of the resilience and the capacity of adaptation of our Union? The fact that we were able to remain united and open during the crisis I think confirms the extraordinary resilience and the strength of the European Union and this should not be underestimated.

I know that, for some, these things do not count for much. They are in a way making an idealisation of the past; they dream probably of a closed Europe; they think Europe was better when half of Europe was under totalitarian communism. I don’t think that. I think Europe today is better than when half of Europe was under communism. The fact that the European Union was able, during all this crisis, to open, to consolidate and to unite on a continental scale almost all of Europe around the values of peace, of freedom and of justice, I think it is a great thing we should commemorate and not to be ashamed of, as some seem to be.

So, this is I think also a reason to commemorate. Many people were predicting, as you probably remember, those of you following these issues at that time, that the European Commission would not be able to function with 25 or 27 or 28 Members, that the European Union would be blocked. The reality is that the European Union was not blocked by the enlargement; the reality that I can share with you now is that sometimes it was more difficult to put together some of the founding Members of the Union than all the 28 countries of Europe.

So I think we should be proud of that as well, collectively, because the European Union was able to remain united and open during the crisis. And when I say open, I mean it in all senses of the word, including with an open attitude towards the world. For instance, when we have promoted a proactive climate agenda after the failure of the Doha Development Round and the Doha trade talks. And we are now leading in that sense, because I believe that trade can be one of the best ways to support growth globally and in the European Union. Or when we, because it was an initiative of the European Union, went to the former President of the United States of America, inviting him and convincing him to organise the first G20 meeting at Heads of State or Government level, because that was a way of having a global cooperative approach and to avoid the return to ugly, nasty protectionism. That could be a temptation in times of crisis. So we were able to keep Europe not only united and, in fact, enlarging its membership, but also open to the rest of the world.

But now, are we stronger or are we weaker? I know that the most critical people today will say that we are weaker. But are we really?

In fact, when the crisis erupted, we had almost no instruments to respond to it. We were facing, as it was said at that time, an unprecedented crisis. Yet we had no mechanisms, for instance to support the countries that were facing the immediate threat of default. A lot has been done. We have collectively, the Commission and the Member States and always with the strong support of the Parliament, we have created a new system of governance. We have today a much more reinforced governance system than before, including with unprecedented powers for the community institutions, and we have done everything to keep the community method at the centre of our integration. For instance, the Commission today has more powers in terms of governance of the Eurozone than before the crisis. The European Central Bank has today the possibility to make direct supervision of the banks in Europe, something that would have been considered impossible earlier; it would have been almost unimaginable before the crisis. And I remember when we spoke about the banking union, when I gave an interview saying that we need a banking union, I received some phone calls from capitals saying ‘Why are you speaking about the banking union? This is not in the Treaties’. And I responded, ‘Yes it is not in the Treaties, but we need it if we want to fulfil the objective of the Treaties, namely the objective of stability and growth’. And today we have a banking union.

Honourable members,

If we look at things in perspective and we think where we were ten years ago and where we are now, we can say with full rigour and in complete observance of the truth that today the European Union, at least in the euro area, is more integrated and with reinforced competences, and we have now, through the community method, more ways to tackle crisis, namely in the euro zone. Not only in the system of governance in the banking union, but also in the legislation of financial stability, financial regulation, financial supervision.

We have presented around 40 new pieces of legislation that were all of them approved by the European Parliament. And once again I want to thank you, because in almost all those debates the European Parliament and the European Commission were on the same side of the debate and were for more ambition, not less ambition for Europe. And so today, I can say that we are stronger, because we have a more integrated system of governance, because we have legislation to tackle abuses in the financial markets, because we have much clearer system of supervision and regulation. So, I think we are now better prepared than we were before to face a crisis, if a crisis like the ones we have seen before should come in the future.

Of course, you can say that there are many difficulties still. Yes, and I am going to say a word about this in a moment regarding the prospects for growth, but please do not forget where we were. We were very close to default, or, to use a less polite word, to a bankruptcy of some of our Member States. And look at where we are now. From the countries that had to ask for adjustment programmes, Portugal and Ireland exited the programme successfully. Ireland is now one of the fastest growing countries in Europe. And in fact all the others that were under the imminent threat of collapsing, are now in a much more stable mood. Spain, that asked for a programme for the banks, also has improved successfully. So in fact only two countries of all those, because we should not also forget the Central and Eastern European countries that also had adjustment programmes, even if they were not yet in the euro area, only two countries are still completing their adjustment programmes.

The deficits now on average in the Eurozone are 2.5%. This is much less than in the United States or in Japan. So, in terms of stability, we are much better now than before. By the way, the Eurozone has a trade surplus. The European Union in general now will have a surplus in goods, in services and, for the first time in many years, in agriculture.

I am saying that because very often the opinion in some of the political sectors is that we are losing with globalisation. This is not the case. Some countries of our Union in fact are not winning that battle, but on average we can say that Europe is gaining the global battle in terms of competition, namely in terms of trade and investment.

But of course, growth is still timid. I think that basically we cannot say that the crisis is completely over, because threats remain, but we have won the battle of stability. Today nobody in the world will honestly bet on the end of the euro. The euro has shown that it is a very strong, credible and indeed stable currency. The reality is that our growth is still timid and clearly below expectations.

So what can we do for growth? This is the important question. And for that I need to make a reminder once again. I know very well that very often the European Union policy and namely the European Commission policy has been presented as completely focused on austerity. I think this is a caricature.

We have constantly asked at least for three important lines – fiscal consolidation certainly, for the countries that are feeling the pressure of the markets. It would be completely irresponsible if they could not frontload a programme of rigour to correct their public finances, but we have always said with equal vigour, probably some would not like to listen, the need for structural reforms, for competitiveness, because the reality is that even before the crisis we were growing under our potential, that is the reality, and with serious problem of lack of competitiveness in some of our countries and so that is why we needed more ambitious structural reforms.

But we have also argued in favour of investment. I have always said that we need more investment, public and private investment. Private investment will come the more we show that we have competitive economies that we can attract private investment. Indeed I am now happy to see that most of our countries, certainly at a different pace, but they are pursuing ambitious structural reforms that would have been considered completely impossible before the crisis.

And the reality is, if we want to be honest in terms of the analysis that the countries that have suffered the most during the financial crisis were precisely those that have lost in terms of cost competitiveness before the crisis. And now, for instance the reforms that have been made by Spain, by Ireland, by Portugal, by Greece, are impressive.

Now, apart from the political consolidation and the structural reforms, we have always seen the need for more investment. Private investment, but public investment as well. You will remember the debate about the MFF. President Schultz remembers certainly. We were together in many meetings asking the Member States to do more in terms of investment and the most important instrument we have at European level for investment is the Multiannual Financial Framework, that is around one trillion euros.

So if there is not more ambitious investment it was not because of a lack of ambition of this Commission, or a lack of ambition of this Parliament. It was because of the opposition of some capitals. This is the reality. We are for solid investment, targeted investment for growth. Not only with the MFF. Remember the proposals that for instance here in the State of the Union speeches with you I have put forward. The increase of the capital for the EIB that finally was agreed. The project bonds that the Member States have accepted, but only as pilot project bonds. The facility that we have created for SMEs with loans from the EIB and funds from the structural funds, from our budget. Unfortunately only two countries wanted to pursue that line.

Or, for instance, the programme for youth, the Youth Guarantee that we have proposed and that the Member States have agreed. But now with the Youth Employment Initiative, only two countries have accepted to have a dedicated programme for youth employment.

So, my dear colleagues, let’s be clear: we are for investment. I wish all the best to the new Commission and to my friend and colleague Jean-Claude Juncker, to have the support of the Member States for a more ambitious investment programme for the next years. I believe this is possible now, I believe the awareness is much bigger on this matter. But once again this is part of a comprehensive strategy that combines fiscal consolidation with structural reforms and investment, and, of course, all the measures taken by us in terms of the banking union and in terms of financial regulation for stability.

And I’m saying this with this vigour because I think it would be now a mistake, after everything we have done, to give up, to show less determination, to abandon the road of structural reform. I think we have done a part of the job, stability is broadly there, growth, even if it is slower than what we would like to have, but now we need determination to complete the reforms so that sustainable growth, not growth fuelled by debt, excessive public or private debt – because such growth is artificial, it’s a fictional growth, and afterwards, sooner or later, we would pay the price – but sustainable growth – that I believe it is possible if we continue the courageous path of reforms and a stronger governance for the European Union.

I don’t have the time now to go over all the other policies we have been developing over the years. But let me just highlight one or two, because I think they are very much at the moment of decision, and I think they are important.

I’m extremely proud that is was my Commission in my first mandate, in 2007, that put forward the most ambitious programme for climate protection in the world. And we are still leading in the world in terms of the climate agenda.

In fact, we were able to join the climate agenda with the energy security agenda, and I’m saying that because this week we are going to have an important discussion in Brussels at Heads of State and Government level, and I hope that the European Union will keep its leadership role – of course not to be isolated but to have others, because we have a responsibility towards our planet. And this is was certainly one of the great advances of these years, that the European Union was able to make the most important and bold steps in terms of fighting climate change.

Another area where I think we could very proud is – in spite of all the restrictions because of our financial situation – that it was possible in the MFF to get 30% more for Horizon 2020, for research and technology. I think there is a great opportunity now for us to do more in that area, as also in the culture side, with our Creative Europe programme.

The reality is that in some areas it was possible, in spite of the economic and financial crisis, to increase investment at European level.

But I’m also very proud that in spite of the pressures of our budgets, we could always be there in terms of development aid and neighbourhood policy.

Whenever there was a big tragedy in the world, from the tsunami in Indonesia to the recent Ebola crisis, from the Syrian refugee crisis to Darfur, we were there, we were among the first. And I think we, Europeans, should also be proud of that, because we are still, together with our Member States, the most important donor for development aid in the world. That is something that corresponds very much to our values and I’m happy that in spite of all the crises we did not abandon our obligations in terms of development cooperation.

I have already said a word about trade. I think it is very important to keep an ambitious trade agenda, an open Europe but for free and fair trade. And the Commission has concluded a record number of agreements, not only with South Korea, Singapore, Central America – the first region to reach an agreement -, Peru, Ecuador, recently with Canada, with Western Africa, Eastern Africa and Southern Africa. And I could also mention some others that are now progressing, like Japan, the United States and also an investment agreement with China.

So we are the most important trade bloc in the world. We are the biggest economy in the world.

And I’m saying that because today I know it’s very fashionable the pessimism, the defeatism about Europe, what I call the intellectual glamour of pessimism. But I believe that we have a good record to show and I believe that together, collectively, we are much stronger and we can better defend our interests and protect our values.

Dear colleagues – I call you colleagues because I believe we have been sometimes in discussions but we have been colleagues in this great enterprise that is the European project -, I think politically we have some lessons to draw.

One is that we have shown great resilience. I think we can say that the forces of integration are stronger than the forces of disintegration. And I believed that day and night, sometimes in very dramatic moments, sometimes when I had to make dramatic appeals to some capitals: to the richer countries, asking them to show more solidarity; and to the poorer countries asking them to show more responsibility.

Sometimes we have done it very discretely, it’s true. The European Commission is probably more discreet than others. I did not want the Commission to be part of the cacophony of different voices during the most acute moments of the crisis. It was extremely market sensitive that situation. But I can tell you, in my full conscience, that we have done everything we could with existing instruments to avoid the fragmentation of the euro or to avoid a division in the European Union. And I very often had to call on my colleagues in the European Council, Heads of State and Government, to show the ethics of European responsibility.

But one of the lessons I draw from this is that if eventually it was possible to come to decisions, it is true that it was sometimes extremely painful and difficult. And took time. We have said also, and I think it is something that we can all agree: democracy is slower than the markets are.

The Commission would have preferred, and I’m sure this Parliament as well, decisions to be bolder, more comprehensive, faster. But we are a Union of democratic states, we are not a super state. And we have to respect different sensitivities.

One of the conclusions I draw from these ten years of experiences is the need to cooperate between institutions. I know sometimes it is more popular to put forward impossible ideas and to criticise others. But I firmly believe that we need to engage with different institutions, that it is not a solution to oppose the countries to the European Union. On the contrary, we have to show to our countries that they are stronger if they are part of the European Union. That we are not diluting their national identity but, on the contrary, we are asking them to share their sovereignty so they can project better their interests globally. I’m firmly convinced of this.

And I’m saying this to you now, as I am leaving in a few days: my only interest is that these lessons are learned so that we do not repeat some mistakes in the future. At the same time, I think we can say that it is not through confrontation but through cooperation that we can attain our objectives.

At the moment I prepare to hand over this very challenging and interesting job to my good friend Jean-Claude Juncker, I want to say here, on my behalf and on behalf of all my colleagues of the Commission, that we wish the new Commission all the best, that they have a great challenge ahead of them but that they could count also on our support. And I’m sure of the support that this Parliament is going to give to them.

Because, Mr President, the relations were not always perfect. But I think you can agree that we were able to establish a fruitful relationship between the Parliament and the Commission.

I’ve been in this Parliament more than 100 times. There was never a Commission that was so often represented in the Parliament as my two Commissions. We have established this cooperation and I’m so grateful because this Parliament, sometimes with very strong demands, was always supportive of the community method, was always supporting the community institutions. And I believe this is very important for the future of Europe.

My dear colleagues of the European project,

The way to solve the problems we have in Europe is not through revolution and even less through counter-revolution. It’s by compromise, it’s by reform. Evolution and reform. We have to reform to adapt to the new challenges but not with new clashes between the institutions, not with clashes against our countries. And I believe that if this idea of strong cooperation putting the European common good above all else, I think my colleague and friend Jean-Claude Juncker and his new Commission will have success, of course based on the support I’m sure you are going to give them.

Because the European Union is a union of values. In these last days I had to face many journalists and they asked me ‘what was your most emotional moment? Which moment did you prefer?’ And I have many, and I also had very difficult ones, to be honest. But one of my most emotional moment was when, on behalf of the European Union, together with Martin Schulz and the President of the European Council, Herman Van Rompuy, we received the Nobel Peace Prize on behalf of the European Union.

I think this was a powerful reminder sent to us from the global community that we count in this world and that what we do is very important. That the values that were at the origin of the creation of our Union, namely the value of peace, are still at our essence today. And that we have to fight for them.

And I think is the moment I really said I want to share with all those in the different institutions, including this Parliament, that have been working for a united, open and stronger Europe. And when I leave this office, with all my colleagues at the Commission, I can tell you that we have not achieved everything we could, or everything we would have liked to have achieved, but I think we have worked with the right conscience, putting the global interest of the European Union above specific interests. And I believe that now there are conditions to continue to do work for a united, open and stronger Europe.

I thank you for your attention.

Auf wiedersehen, goodbye, au revoir, adeus.

Muito obrigado, thank you very much.

Following the statements of the Members of the Parliament, President Barroso made the following closing remarks:

Mr President,

I should like to take up a number of the points raised by the previous speakers. Firstly, I believe that proof that we – and by “we” I mean the Commission of which I have had the honour of being Presidentare on the right track lies in the fact that the criticisms have come from the opposite ends of the spectrum, though often couched in the same terms, resolutely ignoring the difficulties and extraordinary challenges that we have had to face and failing to put forward any coherent response.

The truth is that we have been through possibly the worst economic and financial crisis we have seen since the countries of Europe began to come together and that it was not the European Union or Europe that spawned the crisis. This is what some defenders of national sovereignty, as they like to call themselves, do not or will not understand. It was not Europe that created excessive private debt or caused the financial sector to behave irresponsibly. Quite the opposite – this all took place under national scrutiny, or rather lack thereof. Europe is the answer. We now have one of the most ambitious regulatory and supervisory systems in the world, if not the most ambitious. In other words, saying that Europe is worse off because of the European Union is simply not true. It shows a complete lack of respect and a lack of intellectual rigour. Europe is not responsible for the financial crisis, which had its roots in the United States. Europe had its weaknesses, but what the European Union did was to respond. The blame for this does not lie with the European Union, and I believe this is something that all those who share the European ideal – be they at the left, right or centre of the political spectrum – should have the courage to state, because by remaining silent we will be reinforcing the populist rhetoric of the extreme right and extreme left.

I listened carefully to those of you who said that populism was on the rise and who laid the blame for this at the door of the European Union. Ladies and gentlemen, this is not true. It is abundantly clear that populism and xenophobia exist outside the European Union. Look at the anti-immigrant incidents that have taken place in Switzerland. Look at what happened in Norway when that terrorist killed all those young people because he was opposed to a multicultural Europe. Look at the Tea Party movement in the United States. Is Europe to blame for America’s Tea Party movement?

We are currently seeing an aggressive form of populism around the world, which espouses arguments from both the left and the right. Sometimes it is difficult to tell the difference. So to say the European Union is responsible for this shows a lack of intellectual rigour and a lack of political integrity. What we have to do, as Europeans, is to demonstrate that it was not Europe that caused the crisis or the public debt in the Member States. There was little that Europe could do when, for example, one Member State falsified its accounts. This is something Europe had to face. The first initiative of my second Commission was to ask the Member States to give us more powers to supervise national statistics, because in my first Commission this was rejected. And not by Greece. It was rejected by the big Member States, which were reluctant to hand more powers over to the European Union. So if we really want to have a debate, let us be quite clear and strict in terms of intellectual integrity and political candour.

Ladies and gentlemen, there is one thing that I would like to say to you with the greatest of conviction. The team that I have had the honour of heading has worked with enormous commitment and diligence, whilst always putting Europe’s interests first. There is something that I want to say to you, since this is a political assembly with a wealth of political dynamics, but where the emphasis is always on the common European good. My Commission was not made up of colleagues from the EPP, socialists or liberals. It was made up of people who worked for Europe. My party is the EPP and I am proud of that, but, as President of the Commission, my party is Europe and that is the message I wish to convey, in particular to the major forces of the pro-European centre-left and centre-right.  Differences must, of course, be aired, but they must not be allowed to weaken the pro-European camps. We cannot hand the extreme right or extreme left anything else on a plate. Pro-European forces must come together. They must have the courage to defend Europe. They must do so at national level, and not just here in Strasbourg. We need a major coalition of this nature for Europe because I believe that we have the strength to win the battles of the present and those of the future.

Thank you very much for your attention.

Press Briefing by Press Secretary Josh Earnest and Deputy National Security Advisor Tony Blinken, 7/28/2014

The White House

Office of the Press Secretary

For Immediate Release

July 28, 2014

James S. Brady Press Briefing Room

**Please see below for a correction marked with an asterisk.

1:10 P.M. EDT

MR. EARNEST:  Good afternoon, everybody.  Hope you all enjoyed your weekend.  It’s nice to see you on this Monday afternoon.

We are starting pretty close to on time today, which is a nice, new trend, hopefully that we’ll be able to continue.  The reason for that is I have alongside with me here today the President’s Deputy National Security Advisor, Tony Blinken, who is going to talk to you about a telephone call that the President convened with some of our allies in Europe today. 

I know that over the last couple of weeks you guys have had a lot of questions about what the President is doing in terms of leading the international community’s response to the downing of the Malaysian Airlines jetliner a couple of weeks ago now.  There have also been, obviously, a series of coordinated efforts to increase international pressure on Russia for the actions that they have taken in Ukraine.

So Tony is here to give you a detailed readout of that telephone conversation that the President convened today and answer any questions you may have about our ongoing efforts to coordinate the imposition of economic costs on the Russian regime.  He probably only has 10 or 15 minutes here, so we’ll go through that part of it relatively quickly and then I’ll be around to answer remaining questions you may have.

But I would encourage you, as you’re thinking about the questions you want to ask Tony, to focus on the Russia and Ukraine situation.  I know that there are a lot of newsy developments in Gaza as well, so he can take one or two of those before departing.  But we have to limit this to 10 or 15 minutes. 

So with that, I present Tony Blinken.

MR. BLINKEN:  Josh, thank you. 

Good afternoon.  Let me start by giving you a readout of the President’s videoconference with Prime Minister Cameron of the United Kingdom, President Hollande of France, Chancellor Merkel of Germany, and Prime Minister Renzi of Italy.  I should add that Chancellor Merkel was actually on the phone; the others were on a videoconference.

The primary focus of the conversation today was to talk about Ukraine, and they discussed next steps concerning the crisis there, but also efforts to achieve a cease-fire in Gaza, and the situations in Iraq and Libya.

On Ukraine, they stressed the continued need for unrestricted access to the shoot-down site of Malaysia Air Flight 17 to allow for the recovery of the victims’ remains and for international investigators to proceed with their efforts.  They agreed on the importance of coordinated sanctions measures on Russia for its continued transfer of arms, equipment and fighters into eastern Ukraine, including since the crash, and to press Russia to end its efforts to destabilize the country and instead choose a diplomatic path for resolving the crisis. 

Concerning Gaza, the President noted that Israel has the right to take action to defend itself.  The leaders agreed on the need for an immediate, unconditional humanitarian cease-fire, noting shared concern about the risk of further escalation and the loss of more innocent life.

On Iraq, they discussed the security challenges, welcomed developments in the political process, and urged the swift completion of government coordination and hopefully an inclusive government that results from that.

And then, with respect to Libya, they agreed on the need for an immediate cease-fire among the militias of Tripoli, calling for the seating of the newly elected Council of Representatives, and underscoring support for the U.N. in seeking a resolution to the conflict.  They condemned any use of violence to attack civilians, intimidate officials, or disrupt the political process.

Having said that, let me just spend a few minutes if I can on Ukraine to put this in context.  This was, I think by our count, about the 50th call or videoconference the President has had with his European counterparts since the beginning of this crisis.  And ever since Russia’s illegal annexation of Crimea and its campaign to destabilize Ukraine, the President has led the international effort to isolate Russia for its actions in Ukraine, to support Ukraine itself, and to reassure our allies.

This effort has produced major strategic gains.  We’ve created space for Ukraine to hold successful presidential elections despite Russian efforts to disrupt them.  And that’s produced the strongest leadership Ukraine has seen since the end of the Cold War.  We’ve created space for Ukraine to sign an association agreement with the European Union despite Russian efforts to prevent that.  And recall that the former President Yanukovich’s last-minute about-face on signing that association agreement is exactly what precipitated this crisis in the first place.  And we’ve forged a robust financial support package for Ukraine led by the IMF.

None of these things just happened.  They were the result of a major, sustained effort by the President to lead the international community.

All of that said, the challenge to Ukraine remains acute.  Ukrainian forces are right now making major gains to regain sovereignty in the east, but at the same time, Russia is doubling down on its own efforts to support the separatists and destabilize the country.  Indeed, it is cynically using all of the attention focused on the crash of MH17 as a cover and distraction for its own efforts.  It’s increased the provision of heavy weaponry across the border.  We’ve seen convoys of tanks, multiple rocket launchers, artillery and armored vehicles.  There’s evidence it’s preparing to deliver even more powerful multiple rocket launchers. 

It is firing from positions inside of Russia into Ukraine — something that we documented this weekend.  And we’ve seen a significant re-buildup of Russian forces along the border, potentially positioning Russia for a so-called humanitarian or peacekeeping intervention in Ukraine.

So there’s urgency to arresting these developments, to ending the efforts to destabilize Ukraine.  And the urgency is this:  First, everything we’re seeing is a real drag on the Ukrainian economy.  The military expenditures that Ukraine has to make are a drag, and the fact that Luhansk and Donetsk, which represent 15 percent of Ukrainian GDP and about 25 percent of its manufacturing exports, are basically taken out of the Ukrainian economy equation is also a drag on the economy.

Second, the longer this goes on there’s the risk of further outrageous actions by the separatists or by Russia that deepen the international crisis.  So there’s a need to take further action now to convince Russia to change course and cease its efforts to destabilize Ukraine. 

On the call, the European leaders clearly shared this assessment and a determination to act.  We expect the European Union to take significant additional steps this week, including in key sectors of the Russian economy.  In turn, and in full coordination with Europe, the United States will implement additional measures itself.

Our purpose here, again, is not to punish Russia, but to make clear that it must cease its support for the separatists and stop destabilizing Ukraine.

Let me just finish by putting this in a larger context.  Everything we’ve seen as a result of Russia’s actions and the actions that the President has led in the international community over these many months has turned what is happening in Ukraine into a strategic loser for Russia.  First, we’ve seen a dramatic impact on the Russian economy by the sanctions that the United States, Europeans and others have taken. 

These are acknowledged by the Russian Finance Minister and, indeed, the Deputy Prime Minister, even Putin himself.  Sberbank, the largest bank in Russia and a proxy for the larger economy, a month ago, in announcing a steep decline in profits, said, “In particular, recent events in Ukraine significantly impacted the dynamics of the Russian economy.”

We’ve seen the financial markets go up and down, the ruble hitting lows, the Central Bank has had to spend $37 billion to defend the ruble, about 8 percent of its foreign exchange holdings.  The result is higher borrowing costs and a decrease in the value of Russian savings. 

Capital flight — $70 billion in the first half of this year, more than all of 2013 combined.  And projections for the entire year put it at between $100 billion and $200 billion. 

Foreign investment is drying up.  Investors are looking for stability; they’re looking at countries that keep their international commitments; they’re looking at countries that have connected to the international economy.  On all three counts, Russia is giving them great pause.  The credit rating for Russia was cut to just above the junk level; financing yields are frozen; Russian companies are not issuing bonds to raise capital. And as we’ve seen overall, Russia is heading for economic contraction, not growth, a significant reversal from just a few months ago.

Let me add as well, there’s talk that Russia has “won Crimea.”  But the fact of the matter is what’s happened is it’s lost Ukraine.  Ukraine is more united in a Western orientation than ever before and has a much greater sense of national identity.  We’ve produced, as I mentioned before, the space for elections and the signing of the association agreement with the European Union. 

Crimea itself is becoming a dead weight on the Russian economy — $7 billion a year at least in budget and pension support; $50 to $60 billion required over the next several years for critical infrastructure.  And Russians themselves are asking why this money is being spent in Crimea and not in Russia.  There’s downward pressure on defense spending; there’s downward pressure on discretionary spending as a result of this.

We’ve seen the actions in Ukraine reenergize NATO.  There’s a deeper commitment to Article 5.  NATO itself, it now has a virtual regular presence, a continuous air, land and sea presence on the territory adjacent to Russia.  And we’ll see what happens at the NATO summit, but there’s at least the prospect now for reversing the downward trend in defense spending.

We’ve seen on energy reform a jolt to the Europeans to take real steps to decrease dependence, to diversify supply, to upgrade infrastructure, to develop new sources.

And then, finally, I would say this:  For the Russians and for President Putin, power equals a combination of geopolitical influence and economic strength to provide for the Russian people.  There was a recent survey in Russia — the top two priorities of the Russian people were evenly split:  international influence and creating the conditions for individual prosperity.  As a result of Russia’s actions in Ukraine and as a result of the leadership we’ve exerted, both of those are in jeopardy.  And so is President Putin’s compact with his own people.

There is a way out:  Integrate Russia with the international economy, diversify away from fossil fuels, and play by the rules. That is still on offer.  That is still a possibility.  We would like nothing better than to resolve this crisis in Ukraine diplomatically.  And that’s now up to President Putin.

Q    Thank you very much for this update.  Could you also update us on the U.S. response to the criticism that Senator Kerry has come under in Israel after his attempts to implement a cease-fire there?  Is that damaging to the U.S.-Israel relationship?

MR. BLINKEN:  Let me say this about Secretary Kerry:  Israel has no better friend, no stronger defender.  No one has done more to help Israel achieve a secure and lasting peace.  He has been tireless in his efforts.  And I think that Israel and many countries and friends around the world recognizes exactly that.

Q    Has the President raised this in his call with the Prime Minister yesterday?  Or have U.S. officials been complaining about the criticism to counterparts in Israel?

MR. BLINKEN:  No.  Look, what you see, I think, unfortunately on a regular basis, are people leaking things that are either misinformed or attempting to misinform.  And in particular, with regard to criticism that was levied by undisclosed sources about the proposal for a cease-fire, the proposal that was criticized was not a U.S. proposal, it was a draft to illicit comments from the Israelis.  It was basically a discussion paper based on the original Egyptian initiative.  Virtually every element that unidentified sources complained about was in the initial Egyptian proposal and agreed to by Israel 10 days before.

In that, there was no mention of the need for disarmament. The document underscored the need for discussion between Israel and Palestinian factions.  It called for the opening of border crossings.  It did not make mention of tunnels.  All of this, again, in the Egyptian proposal that the Israelis had accepted and unfortunately Hamas did not.  The document also reflected the strong view that we have that demilitarization as well as reconstruction in Gaza are critical agenda items for any negotiations that follow a cease-fire.

So the bottom line on this is that what was leaked, unfortunately, was I think an effort to misinform or was just misinformed.

Q    The sanctions that we’ve seen so far have been fairly targeted against Russia.  Would you describe the sweeping nature of what you’re talking about later this week being coordinated between Europe and the United States?

MR. BLINKEN:  I don’t want to get ahead of where the Europeans are or where we are, and we’ll see that in the days to come.  But what we know is this:  The Europeans made clear last week that they were prepared to act in key sectors of the Russian economy, including the financial sector, the arms sector, the energy sector.  And so I think you can anticipate actions in those areas.  Similarly, they’re looking to broaden criteria by which they can sanction people or entities.  And I think one of the things they’re looking at is to bring in some of the cronies of President Putin. 

So we’ve already seen with the sanctions to date, as I went through a few moments ago, a very serious impact on the Russian economy.  And indeed, it’s the sanctions themselves and then the climate of tremendous uncertainty they create, even with the prospect of more sanctions, that has led to capital flight, investment drying up and the growth projections going down to basically zero.

Q    And when you talk about this force that’s building up  — the Russians are building up, are they preparing a Russian invasion of Ukraine?

MR. BLINKEN:  One of the things that we believe Russia has been trying to do is, for example, to get the Ukrainians to take some action that they can then use as “justification” for some kind of intervention — so-called humanitarian intervention, or so-called peacekeeping intervention.  So that’s one of the things that we think is in the potential Russian playbook.

The other thing they’re doing, most significantly, is increasing the supply of heavy equipment, weapons and fighters to the separatists across the border.  And this is well documented in what we’ve seen; it’s well documented in social media.

Q    In talking about that buildup and the heavier artillery, are we talking about more surface-to-air missile capability?

MR. BLINKEN:  We are talking about multi-rocket launchers — that’s one of the things we’re seeing — artillery pieces, tanks, armored vehicles, and the concerns, as I said at the outset, about increasingly heavy weaponry.  And I think there’s a reason for this, and the reason is that on the battlefield itself the Ukrainians are doing very well against the separatists in trying to regain the sovereignty of their entire country.  So Russia’s proxies are right now on the losing end of the fight.  And that’s why we think Russia is doubling down.

Q    Do you think there are still Buk missile launchers within Ukraine at this point?

MR. BLINKEN:  We believe that there are SA-11s that are still within Ukraine, including potentially in separatists’ hands.

Q    A two-parter.  How did you arrive at $37 billion spent to defend the ruble?  And second, are there any other security things you’re looking at besides rocket launchers and tanks and heavy equipment? 

MR. BLINKEN:  I think the $37 billion has actually been fairly well documented in the financial press and by other statements that have been made.  We can get you the backup for that.

And in terms of the military equipment that the Russians are providing, again, those are the main elements, but there are certainly other things that are going in.  But in terms of heavy weaponry, those are the critical elements.

Q    You’ve been talking about actions that have been taken this week by the EU and U.S.  I want to go back to something that Josh said from the podium Friday about Russia and Putin were culpable for the downing of Flight 17.  Is there a chance, is there a possibility that Putin could be charged in the International Crimes Court with war crimes, by any chance, with all of this that’s going on right now?

MR. BLINKEN:  When it comes to Russian culpability, I think the record is clear.  The Russians have been directly supporting the separatists with the provision of weapons.  We believe that the SA-11 that was used to shoot down the Malaysian airliner came from Russia.  We don’t know who was operating it.  We believe the weapon itself came from Russia.  The three top leading separatist leaders are all Russian nationals.  So it’s clear that Russia has a significant influence over the separatists and could, if it so desired, get them to cease and desist.

So, in that sense, there is a clear and ongoing culpability by Russia for events in eastern Ukraine and for a failure to de-escalate the situation, and indeed, for the context in which all of this is happening, including the shoot-down of the airliner.

In terms of pointing to exactly who pulled the trigger, that we don’t know yet and we’ll see if we can develop that information.  But the bottom line is this:  Through its ongoing support and increasing support for the separatists, Russia bears responsibility for everything that’s going on in eastern Ukraine.

Q    So you’re saying technically he could be brought before the International Crimes Court?

MR. BLINKEN:  Look, I don’t want to get ahead of anything.  Again, the main point is to emphasize that Russia bears responsibility and has the ability to actually de-escalate this crisis by moving it onto a diplomatic track.  That is what we’d most like to see.

Q    I don’t know if you’re aware of reports that just came now that Gaza Central Hospital has been hit, and 10 more dead Palestinian children.  You said that the United States is Israel’s best friend, which I tend to agree with you.  You also provide them with $3 billion a year, and you give them the Iron Dome that saved countless lives.  How come you don’t have any leverage over Israel to extract a humanitarian cease-fire that would last for seven days?  Does that mean that you basically have no influence over them, or that just Israel doesn’t care?

MR. BLINKEN:  First, I haven’t seen those specific reports. Second, the record is clear:  Israel has repeatedly accepted cease-fires that Hamas has rejected.  So the bottom line on that is clear.

Let me say more generally, no country can abide rockets raining down on its people or terrorists tunneling underground to kill or kidnap its people.  We have consistently and repeatedly defended Israel’s right to defend itself.  Hamas intentionally targets civilians.  And indeed, Iron Dome, thankfully, is there and has protected many of those civilians.  And it uses the Palestinian people as human shields, wrapping them around its weapons and strategic sites. 

In contrast, Israeli policy is to avoid civilian casualties. Indeed, it holds itself to the highest standards to take every precaution to avoid those casualties.  But the fact is, despite its efforts, the civilian suffering in Gaza is great and growing every day.  So the practical reality is that it is difficult for Israel to meet its own high standards.  Civilian casualties are increasing.  It’s especially heartbreaking to see children suffering in this crisis.

This is a problem we have grappled with in Iraq and then in Afghanistan because we, too, hold ourselves to these standards.  It’s incredibly difficult to sustain them.  But I think this underscores the urgency of getting an unconditional, immediate, humanitarian cease-fire.

Q    — said yesterday — just a quick a follow-up — that he wants Gaza demilitarized.  What does that mean in terms of a long-term strategy or a peace negotiation or now as we talk in the next week or so?

MR. BLINKEN:  As I said, we support an immediate, unconditional, humanitarian pause leading, we hope, to a sustainable cease-fire.  We also believe that any process to resolve the crisis in Gaza in a lasting and meaningful way must also lead to the disarmament of terrorist groups.  And what we intend to do is to work closely with Israel, regional partners and the international community to achieve this goal.
MR. EARNEST:  Ann, I’ll give you the last one, then we’ll let Tony go.

Q    Thank you very much.  On Russia, if all the impact of all of these sanctions and all the threat of sanctions are as dire as you’ve described, why hasn’t Putin blinked?

MR. BLINKEN:  He has to make a strategic decision.  And you’re exactly right, he hasn’t made it yet.  We’ve seen him on a regular basis pull back tactically, say the right things in public while he’s doing the wrong things behind the scenes.  So he’s clearly sensitive to the pressure that’s being exerted.  But it’s precisely because we’ve not yet seen a strategic turn from Putin that we believe it’s absolutely essential to take additional measures.  And that’s what the Europeans and the United States intend to do this week.

MR. EARNEST:  Thank you, Tony.

MR. BLINKEN:  Thanks, Josh.  Thank you.

Q    Thank you, Tony.

MR. EARNEST:  All right before we move on to other topics, I do want to do one thing at the top.  And I believe we have a slide that goes along with this — there it is.  Today we got some very good news about Medicare’s financial future.  In the President’s first year in office in 2009, Medicare, Medicaid and Social Security trustees projected the Hospital Insurance Trust Fund would not be able to pay its bills in 2017, just three years from now.  Today’s new date is 2030 — 13 years later than that projection in 2009, an improvement that is thanks in part to the reforms of the Affordable Care Act, such as efforts to reduce hospital spending on preventable readmissions.  And today’s date, you’ll note, is actually even four years later than was projected just last year.

A couple other relevant statistics that are included in the report:  Furthermore, per-capita growth, or the amount spent per Medicare beneficiary has slowed dramatically in recent years, falling to one-third of what it was, and to nearly zero last year — helping to restrain overall growth in Medicare spending even as millions of baby boomers enter the program. 

In addition, the trustees project that the Medicare Part B premium will not increase, which would make 2015 the second year in a row that premiums in Medicare stay flat.

While today’s report focuses on Medicare, it reflects broader trends in the health care system toward much slower growth in costs, a trend that has continued into 2014.  Over the 50 months since enactment of the Affordable Care Act, health care prices have risen at a slower rate than over any comparable period in 50 years. 

So that is a report that is being released as we speak, and so there will obviously be some more details included in that report later today when you get a chance to review it.

So with that, Nedra, do you have any additional questions today?

Q    I do.  Can you give us your response to the VA deal?  Does the President think it does enough to solve the problem with the health care system?

MR. EARNEST:  Well, Nedra, this compromise has been announced between House Republicans and the chair of the Senate Veterans Committee.  We certainly welcome that announcement.  There are a couple of reasons based on published reports that we’re encouraged by that compromise.

The first is, as you even heard me mention on Friday, there are much-needed reforms that need to be implemented into the Veterans Administration.  The President and others have called for those important management reforms to be implemented, and again, based on press reports, the indications of those reforms are that many of them are included in this bill.

The second thing — and this is really important — on July 16th, Acting Secretary Sloan Gibson called for Congress to provide VA the additional resources necessary to deliver timely, high-quality care to veterans through a strengthened VA system while also temporarily using care in the community to help ensure veterans can get the care they need when they need it.

When he asked for those additional resources to address some very specific concerns that he had laid out, that was something that had previously not been part of the debate as it relates to this VA reform package.  So the inclusion of these additional resources at the strong urging of the Acting Secretary is a positive step in the right direction, and something that we think will be very important to the success of some of the reforms that are contemplated by this bill.

In addition, this proposal for on a temporary, as-needed basis to allow some veterans to get some access to care in the community is also the kind of thing that could address the immediate need that many veterans have, but by adding these additional resources over the long term, we feel like those are benefits and care that can be provided through the VA.

So the details of this compromise have yet to be unveiled, so I don’t want to get ahead of the announcement that is planned for Capitol Hill later today.  But the early reports are positive.

Steve.

Q    Josh, Susan Rice was on MSNBC a while ago.  She talked about a grave and deepening concern at the civilian casualties in Gaza.  What exactly would you like the Israelis to do?  Are you calling on them to call off the offensive?

MR. EARNEST:  Well, Steve, we have said many times — I think Tony just had the opportunity to say that we defend Israel’s right to defend themselves.  In fact, you could make a case, and many Israeli political leaders do, that they have a responsibility to make sure that they’re taking steps militarily to account for the safety of civilians on the Israeli side of the border.  This is, after all, the Israeli population that elected them, and they are in the best position to determine what steps are necessary to protect their citizens.  That is their right.

At the same time, Israel leaders often say that they have in place very high standards to ensure the safety and well-being of civilians on the other side of the border, as well.  That stands in stark contrast to the strategy that is deployed by Hamas and other extremist groups in Gaza that are intentionally targeting civilians on the other side of the border.  They are also intentionally using civilians on their side of the border to try to essentially shield their equipment and their personnel from Israeli military activities.  So there is a stark contrast in the approach that’s taken by the Israelis and taken by Hamas and other extremist groups. 

That said, as I mentioned, Israel and their political leaders often talk about the high standards that they put in place for their military operations to ensure the safety and well-being of civilians — innocent civilians on the Palestinian side of the border.  Based on published reports, it’s apparent that there is more that they should do to live up to those standards that they have set.  And that is something that we routinely encourage them to do, while defending their right to defend themselves.  The President reiterated that in his phone call with Prime Minister Netanyahu yesterday.

Michelle.

Q    For months, we’ve been talking about increasing sanctions against Russia, and sort of the ultimate would be these sweeping sectoral sanctions.  So can you explain why that hasn’t happened now?  Why is this not the time to go that far, and still do these kind of slow, incremental building sanctions?

MR. EARNEST:  I would say that the sanctions regime that the President rolled out about a week and a half ago, the day before the downing of the Malaysian Airlines jetliner, did take a step in that very direction.  These were sectoral sanctions that were aimed at specific entities in the defense, financial and energy sectors. 

There was an indication from our European partners that they were taking the preliminary steps necessary to implement similar sanctions in their own right, but those steps have not yet been taken by the Europeans.  That is something that was discussed by the President and his counterparts in Western Europe earlier today, as Tony mentioned.

So there have been some steps that the United States has taken to put in place and impose economic costs against President Putin and the Russian regime.  Tony detailed the economic impact that those sanctions were having.  But as Ann rightly pointed out in her question, it is true that the costs have not yet led to the kind of strategic re-evaluation that we would like to see the Russians undertake.  That is why the international community is actively considering imposing additional costs by having the Europeans increase the amount of sanctions that they have currently levied.  It’s also why the United States is considering additional steps that we could take that would pose additional economic costs on Russia and on President Putin.

Q    Well, so the question was really — I mean, we all know that it’s sort of these very precise, let’s pick this bank or that bank; it’s not on the entire Russian banking system.  Do you think there’s still any leverage left in doing it that way?

MR. EARNEST:  I’m certainly not an expert in terms of the way that these tools are deployed.  But it is our view that there is additional leverage that can be gained.  That is certainly why they’re being contemplated both by leaders in Western Europe, but also by those who do have an expertise in this field in this country. 

As Tony documented, there are a number of economic consequences that Russia has already had to bear in terms of the outflow of private capital, in terms of the downward revisions in their economic projections.  We’ve also seen Russia expend significant sums of money to try to shore up the strength of their own currency.

So there are a number of steps that Russia has taken, and a number of outside evaluators who have reviewed the situation to confirm our suspicion that the economic costs have taken a toll on the Russian economy but they have not yet led President Putin to re-evaluate his strategy in Ukraine.  And that ultimately is our goal.

Bob.

Q    Josh, a quick follow-up on the VA bill.  Is $10 billion enough?  They’ve unveiled it up on the Hill, so is $10 billion enough to take care of the system with its deep, deep troubles right now?

MR. EARNEST:  Well, we’re still evaluating the specifics and details of their package, so I don’t want to get — I don’t want to say any more than I already have.  But in the next couple of days, we may be in a position to comment on that a little further.

Cheryl.

Q    Thanks, Josh.  The House and Senate are very divided on the border supplemental right now.  If they can’t come to agreement by the end of the week, what is the practical effect?  Can you wait until September?

MR. EARNEST:  Cheryl, I would refer you to the individual agencies for the impact that Congress’s failure to pass the supplemental appropriations request would have on their ability to perform the functions that they are required to perform. 

We are hopeful that Congress will take the kind of action that is required.  Both Democrats and Republicans have spoken quite publicly about their concerns about the situation at the border.  This administration has been really clear about what we feel like we need in terms of resources to deal with the influx that we saw of those who were apprehended at the border earlier this summer.

So there’s a detailed package that we’ve put forward.  As I mentioned last week, the Speaker, at a news conference at the end of the week, said that he was still discussing this matter with members of his own caucus.  That was a pretty disappointing development in the part of this administration.  We put forward a detailed package — I happened to bring it with me right here — it includes very detailed numbers about what we feel is necessary.

I noticed that the new Republican Whip was on one of the Sunday shows yesterday and noted that the administration was asking for a — what he described as a blank check.  It makes me think he’s not sure — that he doesn’t know what a blank check is.  We’ve actually been very specific about the numbers that we feel are necessary to deal with this problem and to address the range of concerns that many people have raised about those who have been apprehended at the border.

So we hope that there will be prompt congressional action on this that is in line with their rhetoric on this issue.

Q    Can I follow on that?

MR. EARNEST:  Sure, Wendell, go ahead.

Q    Why isn’t the change in the 2008 law on non-contiguous migrants’ deportation part of that package?  The President had indicated that he supported a change and his advisors say that changing that law would be necessary to send the kids at least from Guatemala, Honduras and El Salvador back as rapidly as those from Canada and Mexico.  So why is that not a part of that package?

MR. EARNEST:  Well, you would have to talk to members of Congress about how they want to put this all together.  What we believe is most important is ensuring that the federal government has the resources necessary to address the range of challenges that are posed by this situation.  Remember, it includes some additional security at the border in the form of surveillance equipment.  It also includes the ability of the federal government to open and operate additional detention centers so that we can detain those individuals who have been apprehended at the border.  It includes some funding for HHS that would allow them to evaluate the basic health needs of those individuals who have been apprehended, both to meet their humanitarian needs, but also to ensure the safety of the broader communities in which they’re detained.

It also includes funding that would allow these repatriation flights to take place so that we could more quickly return those individuals that have been apprehended here to their home countries.  It also, of course, includes additional resources to ensure that those who are apprehended at the border receive the due process to which they’re entitled.  So this means hiring new judges and prosecutors and asylum officials to ensure that that can take place.

Q    But notwithstanding Democrat and Republican differences over the amount of funding, the Republicans say in order to approve some, they’re going to need to change that 2008 law.  Does the President support that?

MR. EARNEST:  Well, it is unfortunate that you would see them take an absolutist position on this.  We certainly do support Congress taking the necessary steps to give the Secretary of Homeland Security the flexibility he needs and the discretion that he can use to more efficiently and effectively enforce the law.  That is a priority of this administration.

But we should not allow the debate around what should be included in that language to hold up something that everybody agrees is necessary, which is additional resources that can be used by the federal government to meet the basic humanitarian needs of those individuals who are apprehended, but also provide funding that can be used to more quickly return those who are found by the courts to not have a legal basis for remaining in the country.

Chris.

Q    Thanks, Josh.  Some members of the Republican Whip team on that have suggested that they’ve gotten surprising support for what is a much smaller check than the one that the White House is asking for, and the $2.7 billion being put forth by the Senate is getting some pushback from Democrats like Joe Manchin, Mary Landrieu and doesn’t seem to have a lot of support on the Republican side.  And you also have a situation where Congress is in session for three and a half days this week.  So with the clock ticking, what do you see as the prognosis and what happens if none of this goes through?

MR. EARNEST:  Well, there are those here in town and probably those of you here in this room that have a little bit more experience in evaluating congressional action than I do.  So I will leave that analysis and prognostication to the experts.  I’ll simply observe that this administration three weeks ago today put forward a very detailed request before Congress, and asking for those additional resources to address a problem that I think to a person every single member of Congress agreed existed. And what we have seen in Congress is a lot of talk, particularly from Republicans, but not a lot of willingness to act.  And that is rather unfortunate.

And we are hopeful that in the pivotal week that remains before Congress departs Washington for the traditional five-week recess that they’ll take the important steps that are necessary to ensure the federal government has the resources to deal with a problem that, again, I think every single member of Congress agrees exists.

Q    Can I also ask you about a Reuters’ report that just came out?  I don’t have any more details than this, that Netanyahu says Israel “must be prepared for protracted Gaza campaign.”  And I wonder if it’s possible that there could be a military victory for Israel, but a loss for them in both the political realm and the court of public opinion.  Can I get your reaction to that statement by Benjamin Netanyahu?

MR. EARNEST:  Well, it’s hard to react to a statement that occurred while I was standing up here.  But let me say that it is the position of the United States that it is in the best interests of people on both sides of the border for a cease-fire to take effect.  And the reason for that is pretty simple, that as long as the violence continues across the border, there are going to be innocent civilians in harm’s way.  And having those innocent civilians face that extreme danger has already had terribly tragic consequences for both the Israeli people and the Palestinian people.  And that’s why we want to see that cease-fire put in place. 

There will be an opportunity once that cease-fire is in place for us to have discussions around the kinds of concerns that have legitimately been raised by the Israelis, in particular about Hamas’ repeated willingness to use tunnels and to fire rockets aimed squarely at doing harm to innocent civilians.

So it is the priority of this administration for a cease-fire to be put in place.  That is why you’ve seen Secretary Kerry doggedly pursue diplomacy to protect the lives of innocent civilians on both sides of that border.

Q    Moving on —

MR. EARNEST:  Sure, Ann.

Q    What are the two or three, maybe three or four absolute necessities that the President thinks Congress has to get done by the end of this week?  Would he ask them to delay their recess?  And would he ever consider skipping Kansas City?

MR. EARNEST:  Well, as we always say with the President’s travel, his trip to my hometown notwithstanding — (laughter) — as is always the case with the President’s travel, if there is a critically important function of the presidency that cannot be performed from the road, the President will not hesitate to change his schedule in order to fulfill those functions.  So I do not anticipate that anything that’s happening in Congress would require that at this point.  But if something does emerge, something unexpected does emerge, I’m sure that is something that the President would consider.

Q    Will he ask Congress to delay its break?

MR. EARNEST:  Well, I’ll let him speak to that.  If he decides that that’s what they should do, then he will say so.  At this point it’s the responsibility of the leaders in Congress to determine their own schedule.

There’s no doubt that there’s a lot of important work that needs to get done this week.  That includes continuing to follow through on these VA reforms on which an agreement was announced over the weekend.  So hopefully that can move forward without any delay or incident.

We certainly would like to see a step taken in terms of passing the supplemental appropriations request that this administration put forward several weeks ago to ensure that the administration has the resources necessary to deal with the problem at the border.

That being said, we could certainly address many of the problems at the border if Congress — if the House were to take action on comprehensive immigration reform legislation that’s already passed the Senate.  The Senate did their work more than a year ago.  Just by taking one simple vote, the House of Representatives could approve that legislation.  The President would sign it.  That would do more to improve our economy, create jobs and reduce the deficit than so many other things that Congress is debating right now.

I think what is the source of particular disappointment on this end of Pennsylvania Avenue, and I think of people in both parties across the country is to see that Congress — House Republicans in particular — are using this very valuable time to debate a piece of legislation that would allow House Republicans to file a taxpayer-funded lawsuit against the President of the United States.  I certainly don’t think that rises to the level of a priority that so many of these other things Congress is ignoring right now. 

Let’s move around a little bit.  Leslie.

Q    Thanks, Josh.  With Secretary Kerry unable to get a cease-fire during his trip, and the President talking to Prime Minister Netanyahu last night in what sounded like pretty blunt terms — what are the next steps for the White House?  And do you — to follow up on a previous question, do you believe that there is any leverage left for the United States with Israel?

MR. EARNEST:  Well, the United States remains deeply engaged in this effort.  Secretary Kerry has been leading that effort over the last week in terms of the dogged diplomacy that he’s been pursuing.  He’s been meeting with his counterparts not just in Israel and among the leaders of the Palestinian people, but also with his counterparts in Egypt and Qatar and Turkey and the Arab League, the U.N.  He’s been deeply engaged in these conversations in pursuit of a multilateral, international effort to try to bring both sides together and reinstate the terms of the 2012 cease-fire, to try to get those civilians who right now are in harm’s way into a safer position.  That’s been the focal point of our efforts, and we remain engaged in it. 

In terms of our relationship with Israel, the United States remains a strong ally of the nation of Israel.  American leaders say that; Israeli leaders say the same thing.  The best evidence that I have of that is the assistance that the United States has provided to the Israeli government to construct the Iron Dome system that right now is, thankfully, protecting so many Israeli civilians from these rockets that Hamas is firing.  So that relationship remains strong. 

And the reason that Secretary Kerry remains so committed to this effort is that — or at least is in part that we believe it is clearly in the interest of Israel’s long-term security for this cease-fire [violence]* to be brought to an end, and for negotiations between the Palestinian leaders and Israeli leaders to get started in terms of trying to eventually down the line reach this broader, two-state solution.

Roger.

Q    I want to go back to what Tony was saying about the sanctions and the outlook for them.  Is that — if I understood it correctly, the EU is going to go first with their sanctions and probably — or possibly this week, is that correct?

MR. EARNEST:  I don’t know that he was in a position to talk about the sequencing of the announcement.  But I do think that he committed to our expectation that we would see Europe act before the end of the week.

Q    Would the U.S. act before the end of the week?

MR. EARNEST:  Our position is that the options like that remain on the table, that the United States is prepared to impose additional costs on Russia for their destabilizing activities in Ukraine.  I’m not in a position to confirm for you whether any decisions have been made about carrying out that action or what those actions might look like.   As we’ve talked before, it would be a strategically unwise thing to do to talk about the details of those sanctions before they’re implemented. But I am in a position to confirm that those kinds of options remain on the table when it comes to the United States.

Q    One final — would the U.S. concentrate on any particular sector?

MR. EARNEST:  Well, if we have additional sanctions to announce, then we will be able to get into those kinds of details.  But at this point, it would be preliminary for me to do so.

Q    Josh?

MR. EARNEST:  Goyal. 

Q    Thank you.  Two questions.  One, some people in the Congress want to close down the 84-year-old Export-Import Bank.  And many small businesses are saying that it is helping small businesses export U.S. goods abroad and also creating thousands of jobs in the U.S.  My question is that some people in the Congress are saying that it is helping only the big companies.  What is the President’s action — or reaction about this bank?  Next month will expire the —

MR. EARNEST:  The President does believe that Congress should take steps to reauthorize the Export-Import Bank.  That’s not just the view of this administration and many Democrats and Republicans on Capitol Hill, it’s also the view of organizations like the National Association of Manufacturers and the Chamber of Commerce.  Those are two organizations that don’t often agree with the President when it comes to some aspects of American economic policy.

But that is an area where this administration agrees that the Export-Import Bank plays a positive role in creating jobs and creating opportunities for American businesses to succeed by opening up markets around the world.

Q    Second question — oh, by the way, it has also created jobs between India and U.S. trade.  Second question is that as far as U.S. ambassador to India is concerned, you think U.S. will have an ambassador before Prime Minister Modi visits the White House end of September?  And second, what is happening as far as Mr. Modi’s address to the Congress?  Is White House is supporting it?

MR. EARNEST:  I don’t have any personnel announcements at this time, Goyal.  But when we have any updates in terms of appointing an ambassador to India, we’ll let you know.

Q    And address — U.S. address, Mr. Modi’s address to the U.S. Congress, is White House supporting it, the President?

MR. EARNEST:  I’m not aware of those conversations.

Bill. 

Q    Josh, there was an unusual editorial in The New York Times yesterday, I’m sure you saw, urging the lifting of the prohibition against — the federal prohibition against marijuana. What is the White House’s position on that?  Would you endorse that?  It’s been there for 44 years.  Maybe too long and time to change it?

MR. EARNEST:  Well, I did read the editorial yesterday, Bill.  The administration’s position on this issue has not changed.  We remain committed to treating drug use as a public health issue, not just a criminal justice problem. 

In light of state laws that legalize the possession of small amounts of marijuana by adults in Colorado and Washington, the Department of Justice issued updated guidance last August to federal prosecutors in all states.  That guidance reiterates that marijuana remains an illegal substance based on the laws that Congress has passed.  But it also recognizes that we have limited enforcement resources, and that those resources are best used to address the most significant threats to our communities.

That was the policy before The New York Times editorial, and it continues to be our policy today.

Q    So does that mean that if other states follow Colorado and Washington, the administration would also give them a green light to go ahead and legalize marijuana without federal interference?

MR. EARNEST:  Well, I’m not sure a green light is the technical term that the Department of Justice has used.  (Laughter.)  But in terms of the guidance that might be offered to those states, I’d refer you to the Department of Justice.

Q    “Blessing” or whatever word you’d want to use.

MR. EARNEST:  The Department of Justice issued guidance like that.  So if there are other states that are contemplating these kinds of steps, you should check with the Department of Justice about that.

Yes, ma’am.

Q    Thank you, Josh.  Yesterday, North Korea military member had announced that North Korea will attack United States, and especially they point to the White House and Canada with using their nuclear missiles.  What is your comment on their threatening like this?

MR. EARNEST:  Well, I have not seen the reports of those specific threats.   I would encourage you to check with my National Security Council colleagues about that.  The United States remains very committed to our alliance with the Republic of Korea, and that alliance allows us to have a strong military-to-military relationship with South Korea to ensure their security.  The United States remains committed as ever to the safety and security of the Republic of Korea.

Q    So you don’t have a strong reaction to them?  Because this is the first time they mentioned the White House and Pentagon specifically.

MR. EARNEST:  Again, I’m not in a position to comment specifically in reaction to those comments because I have not seen them. 

Q    Can I follow on Israel please?

MR. EARNEST:  Let’s move around a little bit.  Zeke. 

Q    Thanks, Josh.  Just with regards to the President’s trip tomorrow, can you give us any reason why is he staying an extra night in your hometown if he’s not doing a fundraiser as you said on Friday?

MR. EARNEST:  At my own personal recommendation.  (Laughter.)  No, look, we’ll have a little bit more about the President’s trip tomorrow.  This will be an opportunity for the President to spend some time in that wonderful community.  He’s going to spend some time talking to individuals who have written him a letter.  You’ve seen on the last couple of trips the President has taken across the country, he’s spent a little extra time in the community to visit with those who have written him letters about the way that individuals in these individual communities are benefiting from some of the policies the President is putting forward and how they could benefit from some of the policies the President is pushing on Congress to implement.  So we’ll have some more detail on that tomorrow.

Q    Tuesday night or Wednesday?

MR. EARNEST:  The President is departing tomorrow.  He’ll remain —

Q    — the letters segment, when he’s going to visit people, is that going to be —
MR. EARNEST:  I believe he’ll have the opportunity to do that both Tuesday evening, as well as on Wednesday. 

Q    One other real quick, just on Secretary Kerry.  Those leaked conversations or however you want to categorize them, is that jeopardizing the U.S. government’s ability to have candid conversations with the Israeli government?  Or do you envision any sort of lasting impact on sort of the relationship between the Obama administration and the Israeli government as a result of these leaks?

MR. EARNEST:  Well, I think Tony made clear that we were disappointed to read them.  But I do not anticipate that they are going to have much of an impact on the very strong, robust relationship that exists between the United States and our allies in Israel.

Q    And, finally, does Secretary Kerry coming back to the United States and the President conducting that phone call yesterday and the one today, is this a shift — is the President going to take a more active personal role now that Secretary Kerry’s efforts have at least temporarily failed?  Is the President going to try to use his own convening authority?

MR. EARNEST:  Well, I do anticipate that the President will continue to be in regular touch with Prime Minister Netanyahu.  That has been the case over the last several weeks of this crisis that has been ongoing in Gaza.  And I do anticipate the President will continue to get regularly briefed by his team and will continue to be on the phone with his counterparts in the region who have concerns about the outcome here.  So I do think that the President will continue to be engaged in this. 

In terms of the next steps, those conversations will continue.  But ultimately, as we’ve said in similar circumstances as it relates to situations like this, it’s ultimately the responsibility of the two sides to come together.  What the international community and what the United States can certainly do is use our influence with both sides to press them to come to an agreement that’s in the best interest of their citizens.

As we’ve pointed out many times, we believe that a cease-fire is in the best interest of civilians on both sides of this conflict.  We just need the leaders of both sides to take the kinds of steps that will impose a cease-fire and allow the leaders to sit around the table and try to broker an agreement here.  And that’s what we’re going to continue to be focused on.

Q    But over the last week, Secretary Kerry was the point person in trying to bring those two sides together.  Has that changed this week?  Will the President be trying to bring the two sides to a multilateral agreement together?

MR. EARNEST:  I guess what I would say — the point that I’m trying to make, Zeke, is that I think there have been a range of officials who have been actively engaged in trying to resolve the situation — the President, first and foremost among them.  It was, however, the case last week that Secretary Kerry was the most senior U.S. official on the ground in the region trying to roll up his sleeves and broker an agreement between those who were involved in this situation. 

So those efforts will continue, even though Secretary Kerry is not actually in the region.  But if he needs to return, I’m sure that he will not hesitate to hop back on the plane and get back to work.

Chris.

Q    Josh, while you were at the podium, the Supreme Court of Appeals affirmed that Virginia’s ban on same-sex marriage is unconstitutional.  It’s the third federal court appeals ruling and the latest in an unbroken string in rulings against the marriage ban since the Supreme Court ruling against DOMA last year.  Any thoughts on this latest decision and the unanimous string of these decisions against marriage bans?

MR. EARNEST:  Well, Chris, I haven’t — as you pointed out, the decision was handed down while I was up here, so I have not had an opportunity to talk to anybody on our team who was able to analyze the decision.  But based on the way that you’ve described it, it does sound like the kind of decision that is consistent with the President’s views on this topic.  I think that’s the best I can do. 

All right, guys, we’ll see you tomorrow. 

END
2:04 P.M. EDT

The Brussels G7 Summit Declaration

Brussels, Belgium – 5 June 2014

1. We, the Leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, the President of the European Council and the President of the European Commission, met in Brussels on 4 and 5 June 2014. This Group came together because of shared beliefs and shared responsibilities. We are profoundly committed to the values of freedom and democracy, and their universality and to fostering peace and security. We believe in open economies, open societies and open governments, including respect for human rights and the rule of law, as the basis for lasting growth and stability. For nearly forty years, we have shown through our actions that collective will can be a powerful catalyst for progress. Our efforts to address major global challenges have also been guided by a commitment to transparency, accountability and partnership with other concerned members of the international community. We remain bound together as a group by these values and this vision. Guided by these shared values and principles, we will continue to work together to meet the challenges of our times. We thank the European Union for hosting this Summit and welcome Germany’s Presidency.

Global Economy

2. Supporting growth and jobs remains our top priority. The global economy has strengthened since we met at Lough Erne, downside risks remain which will need to be managed carefully. Advanced economies are recovering, but continued and sustained growth is needed to bring down unemployment, particularly among young people and the long-term unemployed.

3. We will take further steps to support strong, sustainable and balanced growth, with a common goal of increasing the resilience of our economies. We will present ambitious and comprehensive growth strategies at the G20 Summit in Brisbane, to include action across a broad front including in the areas of investment, small and medium enterprises, employment and participation of women, and trade and innovation, in addition to macroeconomic policies. We will continue to implement our fiscal strategies flexibly to take into account near-term economic conditions, so as to support economic growth and job creation, while putting debt as a share of GDP on a sustainable path.

4. We agreed that 2014 will be the year in which we focus on substantially completing key aspects of the core financial reforms that we undertook in response to the global financial crisis: building resilient financial institutions; ending too-big-to-fail; addressing shadow banking risks; and making derivatives markets safer. We remain committed to the agreed G20 roadmap for work on relevant shadow banking activities with clear deadlines and actions to progress rapidly towards strengthened and comprehensive oversight and regulation appropriate to the systemic risks posed. We will remain vigilant in the face of global risk and vulnerabilities. And we remain committed to tackling tax avoidance including through the G20/Organisation of Economic Cooperation and Development (OECD) Base Erosion and Profit Shifting Action Plan as set out in the agreed timetable, and tax evasion, where we look forward to the rapid implementation of the new single global standard for automatic exchange of tax information. We call on all jurisdictions to take similar action.

5. Trade and investment are key engines for jobs and growth. We reaffirm our commitment to keep our markets open and to fight all forms of protectionism including through standstill and rollback. We are committed to strengthening the rules-based multilateral trading system. We will protect and promote investment and maintain a level playing field for all investors. International standards for public export finance are crucial for avoiding or reducing distortions in global trade. Since we met at Lough Erne, we have made substantial progress on major trade negotiations: Canada-EU; Japan-EU; Canada-Japan; EU-US; the Trans-Pacific Partnership; and the Trade in Services Agreement. We aim to finalise them as soon as possible. We are committed to liberalising trade in environmental goods and services, including through an Environmental Goods agreement. We will work to conclude an expanded Information Technology Agreement as soon as possible. These agreements and initiatives can help support and will be consistent with the multilateral trading system and act as building blocks for future multilateral deals. We welcome the successful outcomes of the 9th World Trade Organisation (WTO) Ministerial Conference. We will prioritise full and swift implementation of the Bali Package, in particular the Trade Facilitation Agreement. We will continue to provide, within our current Aid for Trade commitments, substantial support and capacity building to help implement this agreement, in particular to the benefit of the Least Developed Countries. We fully support efforts in the WTO to secure swift agreement to a balanced work programme for completing the Doha Round.

Energy

6. The use of energy supplies as a means of political coercion or as a threat to security is unacceptable. The crisis in Ukraine makes plain that energy security must be at the centre of our collective agenda and requires a step change to our approach to diversifying energy supplies and modernising our energy infrastructure. Under the Rome G7 Energy Initiative, we will identify and implement concrete domestic policies by each of our governments separately and together, to build a more competitive, diversified, resilient and low-carbon energy system. This work will be based on the core principles agreed by our Ministers of Energy on May 5-6 2014, in Rome:

  • Development of flexible, transparent and competitive energy markets, including gas markets.
  • Diversification of energy fuels, sources and routes, and encouragement of indigenous sources of energy supply.
  • Reducing our greenhouse gas emissions, and accelerating the transition to a low carbon economy as a key contribution to sustainable energy security.
  • Enhancing energy efficiency in demand and supply, and demand response management.
  • Promoting deployment of clean and sustainable energy technologies and continued investment in research and innovation.
  • Improving energy systems resilience by promoting infrastructure modernization and supply and demand policies that help withstand systemic shocks.
  • Putting in place emergency response systems, including reserves and fuel substitution for importing countries, in case of major energy disruptions.

7. Based on these principles we will take the following immediate actions:

  • We will complement the efforts of the European Commission to develop emergency energy plans for winter 2014-2015 at a regional level.
  • Working with international organisations such as the International Energy Agency (IEA), the International Renewable Energy Agency, and the international financial institutions, we will supply technical assistance, including leveraging the private sector, and facilitate exchanges with Ukraine and other European countries seeking to develop indigenous hydrocarbon resources and renewable energies, as well as to improve energy efficiency.
  • We will conduct assessments of our energy security resilience and enhance our joint efforts, including on critical infrastructure, transit routes, supply chains and transport.
  • We will ask the IEA, in close cooperation with the European Commission, to present by the end of 2014 options for individual and collective actions of the G7 in the field of gas security.

8. We will also:

  • Promote the use of low carbon technologies (renewable energies, nuclear in the countries which opt to use it, and carbon capture and storage) including those which work as a base load energy source; and
  • Promote a more integrated Liquefied Natural Gas (LNG) market, including through new supplies, the development of transport infrastructures, storage capabilities, and LNG terminals, and further promotion of flexible gas markets, including relaxation of destination clauses and producer-consumer dialogue.

9. We ask our Energy Ministers to take forward this Rome G7 Energy Initiative and report back to us in 2015.

Climate Change

10. Urgent and concrete action is needed to address climate change, as set out in the Intergovernmental Panel on Climate Change’s Fifth Assessment Report. We therefore remain committed to low-carbon economies with a view to doing our part to limit effectively the increase in global temperature below 2°C above pre-industrial levels. We affirm our strong determination to adopt in 2015 a global agreement – a new protocol, another legal instrument or an agreed outcome with legal force under the convention applicable to all parties – that is ambitious, inclusive and reflects changing global circumstances. We will communicate our intended nationally determined contributions well in advance of the 21st session of the Conference of the Parties (COP21) in Paris (by the first quarter of 2015 by those Parties ready to do so) and call on others to follow our lead. We welcome the Climate Summit of the United Nations Secretary General in September and his invitation to all Parties to prepare for ambitious contributions and to deliver concrete action to reduce emissions and strengthen resilience. We look forward to a successful Summit.

11. We reaffirm our support for the Copenhagen Accord commitments to mobilise USD 100 billion per year by 2020 from a wide variety of sources, both public and private, to address the climate mitigation and adaptation needs of developing countries in the context of their meaningful and transparent mitigation actions. We welcome the adoption of the Green Climate Fund’s operating rules and the decision to commence its initial resource mobilisation in the coming months. We remain committed to the elimination of inefficient fossil fuel subsidies and continued discussions in the OECD on how export credits can contribute to our common goal to address climate change. We will strengthen efforts to improve measurement, reporting, verification and accounting of emissions and improve the reporting of international climate finance flows, consistent with agreed decisions of the United Nations Framework Convention on Climate Change. We will work together and with others to phase down the production and consumption of hydrofluorocarbons (HFC) under the Montreal Protocol. We will also continue to take action to promote the rapid deployment of climate-friendly and safe alternatives in motor vehicle air-conditioning and we will promote public procurement of climate-friendly HFC alternatives.

Development

12. The pursuit of sustainable and inclusive development and greater prosperity in all countries remains a foundational commitment that unites our people and our countries. We continue to implement the commitments we have made at previous Summits. To be accountable we will provide a report in 2015 on progress toward their attainment.

13. We commit to work with all partners to agree an ambitious and universal post-2015 agenda, anchored in a single set of clear and measurable goals. That agenda should complete unfinished business of the Millennium Development Goals. It should be centred on people and focused both on the eradication of extreme poverty, promoting development and on balancing the environmental, economic and social dimensions of sustainable development, including climate change. It should also promote peace and security, democratic governance, the rule of law, gender equality and human rights for all. We are committed to build a global partnership with shared responsibility and mutual accountability to ensure its implementation. We await the synthesis report of the United Nations Secretary General in the second half of 2014. We welcome the African Union’s common position.

14. We will continue to promote inclusive and resilient growth in Africa, working with governments and citizens in Africa to enhance governance and transparency, improve infrastructure, notably in the energy sector, eliminate trade barriers, facilitate trade and investment, and strengthen the responsible and sustainable management of natural resources and the revenues they generate. We welcome the active role of the African Union and the New Partnership for Africa’s Development in the process of reforming the Africa Partnership Forum.

15. Security and development are the prerequisite of a lasting peace in regions affected by the scourge of war, terrorism, organized crime, corruption, instability and poverty, notably the Sahel region, Somalia, Nigeria, South Sudan and Central African Republic. We welcome efforts by African partners and the African Union, supported by the international community, aimed at building their capacities to respond to crises and support stabilisation.

16. We confirm our strong commitment to the Deauville Partnership and our support to Arab countries in transition in their efforts to improve governance and stimulate inclusive growth and job creation, particularly for their youth and women. Our Foreign and Finance Ministers will meet in the margins of United Nations General Assembly, and the International Monetary Fund/World Bank Annual Meetings, to take forward the Partnership.

17. We remain committed to work towards common global standards that raise extractives transparency, which ensure disclosure of companies’ payments to all governments. We welcome the progress made among G7 members to implement quickly such standards. These global standards should continue to move towards project-level reporting. Those governments that are signing up to the Extractive Industries Transparency Initiative standard will voluntarily report their revenues. We confirm our commitment to implement fully the extractive partnerships launched in 2013.

18. We today announce a new initiative on Strengthening Assistance for Complex Contract Negotiations (CONNEX) to provide developing country partners with extended and concrete expertise for negotiating complex commercial contracts, focusing initially on the extractives sector, and working with existing fora and facilities to avoid duplication, to be launched in New York in June and to deliver improvements by our next meeting, including as a first step a central resource hub that brings together information and guidance.

19. We will continue to work to tackle tax evasion and illicit flows of finance, including by supporting developing countries to strengthen their tax base and help create stable and sustainable states. We renew our commitment to deny safe haven to the proceeds of corruption, and to the recovery and return of stolen assets. We remain committed to prevent the misuse of companies and other legal arrangements such as trusts to hide financial flows stemming from corruption, tax evasion, money laundering, and other crimes, ensuring that beneficial ownership information is available in a timely fashion to financial intelligence units, tax collection and law enforcement agencies, for example through central registries or other appropriate mechanisms, leading by example in implementing the Financial Action Task Force and other relevant international standards and our national action plans in line with the principles we agreed at Lough Erne. Greater transparency in this area will help developing countries.

20. Recent events illustrate that corruption undermines trust in governments and limits economic growth. We will build on existing efforts, including in the G20, to take additional steps to prevent this. We continue our engagement to and support of United Nations Office on Drugs and Crime and the World Bank’s Stolen Asset Recovery Initiative. We welcome the outcomes of the Ukraine Forum on Asset Recovery and look forward to the third Arab Forum on Asset Recovery. The G7 remains committed to working with governments and global financial centres to follow up on asset recovery efforts.

21. We remain committed to the Muskoka Initiative on maternal, newborn and child health, and welcome the call made at the Saving Every Woman, Every Child Summit in Toronto to accelerate progress on this global priority. In addition we are committed to ensuring sexual and reproductive health and reproductive rights, and ending child, early and forced marriage and female genital mutilation and other harmful practices. The health and well-being of women and children are improved through ensuring universal access to affordable, quality, essential health services, strengthening health, education and child protection systems and improving nutrition and access to immunisation. We recognise the impact of the GAVI Alliance (Global Alliance for Vaccines and Immunisation) and welcome its efforts to expand access to vaccines to an additional 300 million children during 2016-2020. We welcome Germany’s offer to host the second replenishment in early 2015, reaffirm our commitment, and call on other public and private donors to contribute to the replenishment of the GAVI Alliance. We reaffirm our commitment to an AIDS free generation and to the Global Fund to fight AIDS, Tuberculosis and Malaria to reduce the burden of these three major infectious diseases on eligible countries and regions.

22. To address the threat posed by infectious diseases, we support the Global Health Security Agenda and commit to working with partner countries to strengthen compliance with the World Health Organisation’s (WHO) International Health Regulations and enhance health security around the world. We commit to working across sectors to prevent, detect and respond to infectious diseases, whether naturally occurring, accidental, or the result of a deliberate act by a state or non-state actor. That includes building global capacity so that we are better prepared for threats such as the recent Ebola outbreak in West Africa and working together, in close cooperation with WHO, to develop a Global Action Plan on antimicrobial resistance.

23. We continue to strongly support comprehensive approaches to achieve global food security and nutrition. We look forward to the second International Conference on Nutrition in November 2014 and the Expo Milan 2015, which will provide a platform for the global post-2015 debate on sustainability and food and nutrition security. We continue to support the New Alliance for Food Security and Nutrition under strong African leadership and the successful completion of principles for responsible agricultural investment by the Committee on World Food Security. These will better enable smallholder farmers, especially women, to benefit from sustainable rural development. We continue to support the consistent implementation of the Voluntary Guidelines on Responsible Governance of Tenure of Land, Fisheries and Forests, including by building on the land partnerships we launched in 2013 and the Global Agriculture and Food Security Programme.

Ukraine

24. We welcome the successful conduct under difficult circumstances of the election in Ukraine on 25 May. The strong voter turnout underlined the determination of Ukraine’s citizens to determine the future of their country. We welcome Petro Poroshenko as the President-elect of Ukraine and commend him for reaching out to all the people of Ukraine.

25. In the face of unacceptable interference in Ukraine’s sovereign affairs by the Russian Federation, we stand by the Ukrainian government and people. We call upon the illegal armed groups to disarm. We encourage the Ukrainian authorities to maintain a measured approach in pursuing operations to restore law and order. We fully support the substantial contribution made by the Organisation for Security Cooperation in Europe (OSCE) to the de-escalation of the crisis through the Special Monitoring Mission and other OSCE instruments. We commend the willingness of the Ukrainian authorities to continue the national dialogue in an inclusive manner. We welcome the “Memorandum of Peace and Unity” adopted by the Verkhovna Rada on 20 May and express the wish that it can be implemented rapidly. We also encourage the Ukrainian parliament and the Government of Ukraine to continue to pursue constitutional reform in order to provide a framework for deepening and strengthening democracy and accommodating the rights and aspirations of all people in all regions of Ukraine.

26. The G7 are committed to continuing to work with Ukraine to support its economic development, sovereignty and territorial integrity. We encourage the fulfilment of Ukraine’s commitment to pursue the difficult reforms that will be crucial to support economic stability and unlock private sector-led growth. We welcome the decision of the International Monetary Fund (IMF) to approve a $17 billion programme for Ukraine, which will anchor other bilateral and multilateral assistance and loans, including around $18 billion foreseen to date from G7 partners. We welcome the swift disbursement of macro-economic support for Ukraine. We support an international donor coordination mechanism to ensure effective delivery of economic assistance and we welcome the EU’s intention to hold a high-level coordination meeting in Brussels. We welcome ongoing efforts to diversify Ukraine’s sources of gas, including through recent steps in the EU towards enabling reverse gas flow capacities and look forward to the successful conclusion of the talks, facilitated by the European Commission, on gas transit and supply from the Russian Federation to Ukraine.

27. We are united in condemning the Russian Federation’s continuing violation of the sovereignty and territorial integrity of Ukraine. Russia’s illegal annexation of Crimea, and actions to de-stabilise eastern Ukraine are unacceptable and must stop. These actions violate fundamental principles of international law and should be a concern for all nations. We urge the Russian Federation to recognise the results of the election, complete the withdrawal of its military forces on the border with Ukraine, stop the flow of weapons and militants across the border and to exercise its influence among armed separatists to lay down their weapons and renounce violence. We call on the Russian Federation to meet the commitments it made in the Geneva Joint Statement and cooperate with the government of Ukraine as it implements its plans for promoting peace, unity and reform.

28. We confirm the decision by G7 countries to impose sanctions on individuals and entities who have actively supported or implemented the violation of Ukraine’s sovereignty and territorial integrity and who are threatening the peace, security and stability of Ukraine. We are implementing a strict policy of non-recognition with respect to Crimea/Sevastopol, in line with UN General Assembly Resolution 68/262. We stand ready to intensify targeted sanctions and to implement significant additional restrictive measures to impose further costs on Russia should events so require.

29. The projects funded by the donor community to convert the Chernobyl site into a stable and environmentally safe condition have reached an advanced stage of completion. While recognizing the complexity of these first of a kind projects, we call upon all concerned parties to make an additional effort to bring them to a satisfactory conclusion and call upon project parties to keep costs under control. This remains a high priority for us.

Syria

30. We strongly condemn the Assad regime’s brutality which drives a conflict that has killed more than 160,000 people and left 9.3 million in need of humanitarian assistance. We denounce the 3 June sham presidential election: there is no future for Assad in Syria. We again endorse the Geneva Communiqué, which calls for a transitional governing body exercising full executive powers and agreed by mutual consent, based on a vision for a united, inclusive and democratic Syria. We strongly condemn the violations of international humanitarian law and human rights and indiscriminate artillery shelling and aerial bombardment by the Syrian regime. There is evidence that extremist groups have also perpetrated grave human rights abuses. All those responsible for such abuses must be held to account. We welcome the commitment of the National Coalition and Free Syrian Army to uphold international law. We deplore Russia and China’s decision to veto the UN Security Council (UNSC) Resolution draft authorising referral to the International Criminal Court and demanding accountability for the serious and ongoing crimes committed in Syria.

31. We are committed to supporting the neighbouring countries bearing the burden of Syrian refugee inflows and deplore the failure to implement UNSC Resolution 2139 on humanitarian assistance. We urge all parties to the conflict to allow access to aid for all those in need, by the most direct routes, including across borders and conflict lines, and support further urgent action by the UNSC to that end. In our funding we decide to give particular support to humanitarian actors that can reach those most in need, including across borders. We call for the international community to meet the enormous funding needs of the UN appeals for Syria and its neighbours. We resolve to intensify our efforts to address the threat arising from foreign fighters travelling to Syria. We are deeply concerned by allegations of repeated chemical agent use and call on all parties in Syria to cooperate fully with the Organisation for the Prohibition of Chemical Weapons (OPCW) fact-finding mission. We call on Syria to comply with its obligations under UNSC Resolution 2118, decisions of the Executive Council of the OPCW and the Chemical Weapons Convention to ensure the swift removal of its remaining chemical stockpile for destruction, and to destroy its production facilities immediately and answer all questions regarding its declaration to the OPCW.

Libya

32. We reaffirm our support for a free, prosperous and democratic Libya which will play its role in promoting regional stability. We express serious concern at the recent violence and urge all Libyans to engage with the political process through peaceful and inclusive means, underpinned by respect for the rule of law. We urge continued and coordinated engagement by the international community to support the Libyan transition and efforts to promote political dialogue, in coordination with the UN and with the UN Support Mission in Libya fulfilling its mandate in that respect. We ask all in the international community to respect fully Libyan’s sovereignty and the principle of non-intervention in its affairs. In this framework, we commend the proposal of the High National Electoral Commission, endorsed by the General National Congress, to convene the elections on June 25. We emphasise the importance of these elections in restarting the political process and appreciate the vital work of the Constitution Drafting Assembly.

Mali and Central African Republic

33. We welcome the ceasefire signed on May 23 by the Malian Government and armed groups in the North of Mali, thanks to efforts by the African Union, through its Presidency, and the UN. We reaffirm our strong commitment to a political solution and to an inclusive dialogue process that must start without delay, as prescribed by the Ouagadougou agreement and UNSC decisions. We fully support the United Nation’s Multidimensional Integrated Stabilisation Mission in Mali efforts in stabilising the country and, with the commitment of neighbouring countries, including Algeria, Mauritania and the Economic Community of West African States, in working for a durable settlement respectful of the unity, territorial integrity and national sovereignty of Mali.

34. We commend the role played on the ground in the Central African Republic by the AU-led International Support Mission to the Central African Republic, together with the forces sent by France and the European Union, to support the transition and encourage the Transitional Authorities to take urgent concrete steps toward holding free, fair, transparent and inclusive elections. We fully support the UN efforts in the areas of security, reconciliation, preparation of the elections, and humanitarian assistance.

Iran

35. We reaffirm our strong commitment to a diplomatic resolution of the Iranian nuclear issue and welcome the efforts by the E3+3, led by High Representative Ashton, and Iran to negotiate a comprehensive solution that provides confidence in the exclusively peaceful nature of Iran’s nuclear programme. We underline the importance of the continuing effective implementation by the E3+3 and Iran of the Joint Plan of Action. We call on Iran to cooperate fully with the International Atomic Energy Agency on verification of Iran’s nuclear activities and to resolve all outstanding issues, including, critically, those relating to possible military dimensions. We strongly urge Iran to fully respect its human rights obligations. We call on Iran to play a more constructive role in supporting regional security, in particular in Syria, and to reject all acts of terrorism and terrorist groups.

North Korea

36. We strongly condemn North Korea’s continued development of its nuclear and ballistic missile programmes. We urge North Korea to abandon all nuclear weapons and existing nuclear and ballistic missile programmes and to comply fully with its obligations under relevant UNSC resolutions and commitments under the September 2005 Joint Statement of the Six-Party Talks. We call on the international community to implement fully UN sanctions. We reiterate our grave concerns over the ongoing systematic, widespread and gross human rights violations in North Korea documented in the report of the UN Commission of Inquiry, and urge North Korea to take immediate steps to address these violations, including on the abductions issue, and cooperate fully with all relevant UN bodies. We continue to work to advance accountability for North Korea’s serious human rights violations.

Middle East Peace Process

37. We fully support the United States’ efforts to secure a negotiated two-state solution. We regret that greater progress has not been made by the parties and urge them to find the common ground and political strength needed to resume the process. A negotiated two-state solution remains the only way to resolve the conflict. We call on both sides to exercise maximum restraint and to avoid any unilateral action which may further undermine peace efforts and affect the viability of a two-state solution.

Afghanistan

38. We renew our long-term commitment to a democratic, sovereign, and unified Afghanistan and our enduring partnership with the Government of Afghanistan based on the principles of mutual respect and mutual accountability. The first round of presidential elections and the provincial council elections marked a historic achievement, especially for the more than 2.5 million women who voted, and we look forward to the completion of the electoral process. We continue to assist the Government of Afghanistan to strengthen their institutions of governance, reduce corruption, combat terrorism, support economic growth, and counter narcotics. We continue to actively support an inclusive Afghan-led and Afghan-owned process of reconciliation.

Maritime Navigation and Aviation

39. We reaffirm the importance of maintaining a maritime order based upon the universally-agreed principles of international law. We remain committed to international cooperation to combat piracy and other maritime crime, consistent with international law and internationally recognised principles of jurisdiction in international waters. We are deeply concerned by tensions in the East and South China Sea. We oppose any unilateral attempt by any party to assert its territorial or maritime claims through the use of intimidation, coercion or force. We call on all parties to clarify and pursue their territorial and maritime claims in accordance with international law. We support the rights of claimants to seek peaceful resolution of disputes in accordance with international law, including through legal dispute settlement mechanisms. We also support confidence-building measures. We underscore the importance of the freedom of navigation and overflight and also the effective management of civil air traffic based on international law and International Civil Aviation Organization standards and practices.

Other issues

40. We reaffirm our commitment to the protection and promotion of all human rights and fundamental freedoms, including religious freedom, for all persons. We recognise the need to show unprecedented resolve to promote gender equality, to end all forms of discrimination and violence against women and girls, to end child, early and forced marriage and to promote full participation and empowerment of all women and girls. We look forward to the Global Summit to End Sexual Violence in Conflict taking place in London later this month.

41. We reiterate our condemnation of terrorism and our commitment to cooperate in all relevant fora to prevent and respond to terrorism effectively, and in a comprehensive manner, while respecting human rights and the rule of law. We condemn the kidnapping of hundreds of schoolgirls by Boko Haram as an unconscionable crime and intend do everything possible to support the Nigerian government to return these young women to their homes and to bring the perpetrators to justice.

42. We confirm that non-proliferation/disarmament issues remain a top priority and welcome the G7 Non-proliferation Directors Group statement issued today.

The Brussels G-7 Summit Declaration

The White House

Office of the Press Secretary

For Immediate Release

June 05, 2014

Brussels, Belgium
June 5, 2014

1.       We, the Leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, the President of the European Council and the President of the European Commission, met in Brussels on 4 and 5 June 2014. This Group came together because of shared beliefs and shared responsibilities. We are profoundly committed to the values of freedom and democracy, and their universality and to fostering peace and security. We believe in open economies, open societies and open governments, including respect for human rights and the rule of law, as the basis for lasting growth and stability.  For nearly forty years, we have shown through our actions that collective will can be a powerful catalyst for progress. Our efforts to address major global challenges have also been guided by a commitment to transparency, accountability and partnership with other concerned members of the international community. We remain bound together as a group by these values and this vision. Guided by these shared values and principles, we will continue to work together to meet the challenges of our times. We thank the European Union for hosting this Summit and welcome Germany’s Presidency.

Global Economy

2.       Supporting growth and jobs remains our top priority. The global economy has strengthened since we met at Lough Erne, downside risks remain which will need to be managed carefully. Advanced economies are recovering, but continued and sustained growth is needed to bring down unemployment, particularly among young people and the long-term unemployed.

3.       We will take further steps to support strong, sustainable and balanced growth, with a common goal of increasing the resilience of our economies. We will present ambitious and comprehensive growth strategies at the G-20 Summit in Brisbane, to include action across a broad front including in the areas of investment, small and medium enterprises, employment and participation of women, and trade and innovation, in addition to macroeconomic policies. We will continue to implement our fiscal strategies flexibly to take into account near-term economic conditions, so as to support economic growth and job creation, while putting debt as a share of GDP on a sustainable path.

4.       We agreed that 2014 will be the year in which we focus on substantially completing key aspects of the core financial reforms that we undertook in response to the global financial crisis: building resilient financial institutions; ending too-big-to-fail; addressing shadow banking risks; and making derivatives markets safer. We remain committed to the agreed G-20 roadmap for work on relevant shadow banking activities with clear deadlines and actions to progress rapidly towards strengthened and comprehensive oversight and regulation appropriate to the systemic risks posed. We will remain vigilant in the face of global risk and vulnerabilities. And we remain committed to tackling tax avoidance including through the G-20/Organisation of Economic Cooperation and Development (OECD) Base Erosion and Profit Shifting Action Plan as set out in the agreed timetable, and tax evasion, where we look forward to the rapid implementation of the new single global standard for automatic exchange of tax information. We call on all jurisdictions to take similar action.

5.       Trade and investment are key engines for jobs and growth. We reaffirm our commitment to keep our markets open and to fight all forms of protectionism including through standstill and rollback. We are committed to strengthening the rules-based multilateral trading system. We will protect and promote investment and maintain a level playing field for all investors. International standards for public export finance are crucial for avoiding or reducing distortions in global trade. Since we met at Lough Erne, we have made substantial progress on major trade negotiations: Canada-EU; Japan-EU; Canada-Japan; EU-US; the Trans-Pacific Partnership; and the Trade in Services Agreement. We aim to finalise them as soon as possible. We are committed to liberalising trade in environmental goods and services, including through an Environmental Goods agreement. We will work to conclude an expanded Information Technology Agreement as soon as possible. These agreements and initiatives can help support and will be consistent with the multilateral trading system and act as building blocks for future multilateral deals. We welcome the successful outcomes of the 9th World Trade Organisation (WTO) Ministerial Conference.  We will prioritise full and swift implementation of the Bali Package, in particular the Trade Facilitation Agreement. We will continue to provide, within our current Aid for Trade commitments, substantial support and capacity building to help implement this agreement, in particular to the benefit of the Least Developed Countries. We fully support efforts in the WTO to secure swift agreement to a balanced work programme for completing the Doha Round.

Energy

6.       The use of energy supplies as a means of political coercion or as a threat to security is unacceptable. The crisis in Ukraine makes plain that energy security must be at the centre of our collective agenda and requires a step change to our approach to diversifying energy supplies and modernising our energy infrastructure. Under the Rome G-7 Energy Initiative, we will identify and implement concrete domestic policies by each of our governments separately and together, to build a more competitive, diversified, resilient and low-carbon energy system.  This work will be based on the core principles agreed by our Ministers of Energy on May 5-6 2014, in Rome:

  • Development of flexible, transparent and competitive energy markets, including gas markets.
  • Diversification of energy fuels, sources and routes, and encouragement of indigenous sources of energy supply.
  • Reducing our greenhouse gas emissions, and accelerating the transition to a low carbon economy as a key contribution to sustainable energy security.
  • Enhancing energy efficiency in demand and supply, and demand response management.
  • Promoting deployment of clean and sustainable energy technologies and continued investment in research and innovation.
  • Improving energy systems resilience by promoting infrastructure modernization and supply and demand policies that help withstand systemic shocks.
  • Putting in place emergency response systems, including reserves and fuel substitution for importing countries, in case of major energy disruptions.

7.       Based on these principles we will take the following immediate actions:

  • We will complement the efforts of the European Commission to develop emergency energy plans for winter 2014-2015 at a regional level.
  • Working with international organisations such as the International Energy Agency  (IEA), the International Renewable Energy Agency, and the international financial institutions, we will supply technical assistance, including leveraging the private sector, and facilitate exchanges with Ukraine and other European countries seeking to develop indigenous hydrocarbon resources and renewable energies, as well as to improve energy efficiency.
  • We will conduct assessments of our energy security resilience and enhance our joint efforts, including on critical infrastructure, transit routes, supply chains and transport.
  • We will ask the IEA, in close cooperation with the European Commission, to present by the end of 2014 options for individual and collective actions of the G-7 in the field of gas security.

8.       We will also:

  • Promote the use of low carbon technologies (renewable energies, nuclear in the countries which opt to use it, and carbon capture and storage) including those which work as a base load energy source; and
  • Promote a more integrated Liquefied Natural Gas (LNG) market, including through new supplies, the development of transport infrastructures, storage capabilities, and LNG terminals, and further promotion of flexible gas markets, including relaxation of destination clauses and producer-consumer dialogue.

9.       We ask our Energy Ministers to take forward this Rome G-7 Energy Initiative and report back to us in 2015.

Climate Change

10.      Urgent and concrete action is needed to address climate change, as set out in the Intergovernmental Panel on Climate Change’s Fifth Assessment Report. We therefore remain committed to low-carbon economies with a view to doing our part to limit effectively the increase in global temperature below 2°C above pre-industrial levels. We affirm our strong determination to adopt in 2015 a global agreement – a new protocol, another legal instrument or an agreed outcome with legal force under the convention applicable to all parties – that is ambitious, inclusive and reflects changing global circumstances. We will communicate our intended nationally determined contributions well in advance of the 21st session of the Conference of the Parties (COP21) in Paris (by the first quarter of 2015 by those Parties ready to do so) and call on others to follow our lead. We welcome the Climate Summit of the United Nations Secretary General in September and his invitation to all Parties to prepare for ambitious contributions and to deliver concrete action to reduce emissions and strengthen resilience. We look forward to a successful Summit.

11.      We reaffirm our support for the Copenhagen Accord commitments to mobilise USD 100 billion per year by 2020 from a wide variety of sources, both public and private, to address the climate mitigation and adaptation needs of developing countries in the context of their meaningful and transparent mitigation actions. We welcome the adoption of the Green Climate Fund’s operating rules and the decision to commence its initial resource mobilisation in the coming months.  We remain committed to the elimination of inefficient fossil fuel subsidies and continued discussions in the OECD on how export credits can contribute to our common goal to address climate change. We will strengthen efforts to improve measurement, reporting, verification and accounting of emissions and improve the reporting of international climate finance flows, consistent with agreed decisions of the United Nations Framework Convention on Climate Change.  We will work together and with others to phase down the production and consumption of hydrofluorocarbons (HFC) under the Montreal Protocol. We will also continue to take action to promote the rapid deployment of climate-friendly and safe alternatives in motor vehicle air-conditioning and we will promote public procurement of climate-friendly HFC alternatives.

Development

12.      The pursuit of sustainable and inclusive development and greater prosperity in all countries remains a foundational commitment that unites our people and our countries. We continue to implement the commitments we have made at previous Summits. To be accountable we will provide a report in 2015 on progress toward their attainment.

13.      We commit to work with all partners to agree an ambitious and universal post-2015 agenda, anchored in a single set of clear and measurable goals. That agenda should complete unfinished business of the Millennium Development Goals. It should be centred on people and focused both on the eradication of extreme poverty, promoting development and on balancing the environmental, economic and social dimensions of sustainable development, including climate change. It should also promote peace and security, democratic governance, the rule of law, gender equality and human rights for all. We are committed to build a global partnership with shared responsibility and mutual accountability to ensure its implementation. We await the synthesis report of the United Nations Secretary General in the second half of 2014. We welcome the African Union’s common position.

14.      We will continue to promote inclusive and resilient growth in Africa, working with governments and citizens in Africa to enhance governance and transparency, improve infrastructure, notably in the energy sector, eliminate trade barriers, facilitate trade and investment, and strengthen the responsible and sustainable management of natural resources and the revenues they generate. We welcome the active role of the African Union and the New Partnership for Africa’s Development in the process of reforming the Africa Partnership Forum.

15.      Security and development are the prerequisite of a lasting peace in regions affected by the scourge of war, terrorism, organized crime, corruption, instability and poverty, notably the Sahel region, Somalia, Nigeria, South Sudan and Central African Republic. We welcome efforts by African partners and the African Union, supported by the international community, aimed at building their capacities to respond to crises and support stabilisation.

16.      We confirm our strong commitment to the Deauville Partnership and our support to Arab countries in transition in their efforts to improve governance and stimulate inclusive growth and job creation, particularly for their youth and women. Our Foreign and Finance Ministers will meet in the margins of United Nations General Assembly, and the International Monetary Fund/World Bank Annual Meetings, to take forward the Partnership.

17.      We remain committed to work towards common global standards that raise extractives transparency, which ensure disclosure of companies’ payments to all governments.  We welcome the progress made among G-7 members to implement quickly such standards. These global standards should continue to move towards project-level reporting. Those governments that are signing up to the Extractive Industries Transparency Initiative standard will voluntarily report their revenues. We confirm our commitment to implement fully the extractive partnerships launched in 2013.

18.      We today announce a new initiative on Strengthening Assistance for Complex Contract Negotiations (CONNEX) to provide developing country partners with extended and concrete expertise for negotiating complex commercial contracts, focusing initially on the extractives sector, and working with existing fora and facilities to avoid duplication, to be launched in New York in June and to deliver improvements by our next meeting, including as a first step a central resource hub that brings together information and guidance.

19.      We will continue to work to tackle tax evasion and illicit flows of finance, including by supporting developing countries to strengthen their tax base and help create stable and sustainable states. We renew our commitment to deny safe haven to the proceeds of corruption, and to the recovery and return of stolen assets. We remain committed to prevent the misuse of companies and other legal arrangements such as trusts to hide financial flows stemming from corruption, tax evasion, money laundering, and other crimes, ensuring that beneficial ownership information is available in a timely fashion to financial intelligence units, tax collection and law enforcement agencies, for example through central registries or other appropriate mechanisms, leading by example in implementing the Financial Action Task Force and other relevant international standards and our national action plans in line with the principles we agreed at Lough Erne. Greater transparency in this area will help developing countries.

20.      Recent events illustrate that corruption undermines trust in governments and limits economic growth. We will build on existing efforts, including in the G-20, to take additional steps to prevent this. We continue our engagement to and support of United Nations Office on Drugs and Crime and the World Bank’s Stolen Asset Recovery Initiative. We welcome the outcomes of the Ukraine Forum on Asset Recovery and look forward to the third Arab Forum on Asset Recovery. The G-7 remains committed to working with governments and global financial centres to follow up on asset recovery efforts.

21.      We remain committed to the Muskoka Initiative on maternal, newborn and child health, and welcome the call made at the Saving Every Woman, Every Child Summit in Toronto to accelerate progress on this global priority. In addition we are committed to ensuring sexual and reproductive health and reproductive rights, and ending child, early and forced marriage and female genital mutilation and other harmful practices. The health and well-being of women and children are improved through ensuring universal access to affordable, quality, essential health services, strengthening health, education and child protection systems and improving nutrition and access to immunisation. We recognise the impact of the GAVI Alliance (Global Alliance for Vaccines and Immunisation) and welcome its efforts to expand access to vaccines to an additional 300 million children during 2016-2020. We welcome Germany’s offer to host the second replenishment in early 2015, reaffirm our commitment, and call on other public and private donors to contribute to the replenishment of the GAVI Alliance. We reaffirm our commitment to an AIDS free generation and to the Global Fund to fight AIDS, Tuberculosis and Malaria to reduce the burden of these three major infectious diseases on eligible countries and regions.

22.      To address the threat posed by infectious diseases, we support the Global Health Security Agenda and commit to working with partner countries to strengthen compliance with the World Health Organisation’s (WHO) International Health Regulations and enhance health security around the world.  We commit to working across sectors to prevent, detect and respond to infectious diseases, whether naturally occurring, accidental, or the result of a deliberate act by a state or non-state actor. That includes building global capacity so that we are better prepared for threats such as the recent Ebola outbreak in West Africa and working together, in close cooperation with WHO, to develop a Global Action Plan on antimicrobial resistance.

23.      We continue to strongly support comprehensive approaches to achieve global food security and nutrition. We look forward to the second International Conference on Nutrition in November 2014 and the Expo Milan 2015, which will provide a platform for the global post-2015 debate on sustainability and food and nutrition security. We continue to support the New Alliance for Food Security and Nutrition under strong African leadership and the successful completion of principles for responsible agricultural investment by the Committee on World Food Security. These will better enable smallholder farmers, especially women, to benefit from sustainable rural development. We continue to support the consistent implementation of the Voluntary Guidelines on Responsible Governance of Tenure of Land, Fisheries and Forests, including by building on the land partnerships we launched in 2013 and the Global Agriculture and Food Security Programme.

Ukraine

24.   We welcome the successful conduct under difficult circumstances of the election in Ukraine on 25 May. The strong voter turnout underlined the determination of Ukraine’s citizens to determine the future of their country.  We welcome Petro Poroshenko as the President-elect of Ukraine and commend him for reaching out to all the people of Ukraine.

25.   In the face of unacceptable interference in Ukraine’s sovereign affairs by the Russian Federation, we stand by the Ukrainian government and people. We call upon the illegal armed groups to disarm. We encourage the Ukrainian authorities to maintain a measured approach in pursuing operations to restore law and order. We fully support the substantial contribution made by the Organisation for Security and Cooperation in Europe (OSCE) to the de-escalation of the crisis through the Special Monitoring Mission and other OSCE instruments. We commend the willingness of the Ukrainian authorities to continue the national dialogue in an inclusive manner. We welcome the “Memorandum of Peace and Unity” adopted by the Verkhovna Rada on 20 May and express the wish that it can be implemented rapidly.  We also encourage the Ukrainian parliament and the Government of Ukraine to continue to pursue constitutional reform in order to provide a framework for deepening and strengthening democracy and accommodating the rights and aspirations of all people in all regions of Ukraine.

26.   The G-7 are committed to continuing to work with Ukraine to support its economic development, sovereignty and territorial integrity. We encourage the fulfilment of Ukraine’s commitment to pursue the difficult reforms that will be crucial to support economic stability and unlock private sector-led growth. We welcome the decision of the International Monetary Fund (IMF) to approve a $17 billion programme for Ukraine, which will anchor other bilateral and multilateral assistance and loans, including around $18 billion foreseen to date from G-7 partners.  We welcome the swift disbursement of macro-economic support for Ukraine. We support an international donor coordination mechanism to ensure effective delivery of economic assistance and we welcome the EU’s intention to hold a high-level coordination meeting in Brussels. We welcome ongoing efforts to diversify Ukraine’s sources of gas, including through recent steps in the EU towards enabling reverse gas flow capacities and look forward to the successful conclusion of the talks, facilitated by the European Commission, on gas transit and supply from the Russian Federation to Ukraine.

27.   We are united in condemning the Russian Federation’s continuing violation of the sovereignty and territorial integrity of Ukraine.  Russia’s illegal annexation of Crimea, and actions to de-stabilise eastern Ukraine are unacceptable and must stop. These actions violate fundamental principles of international law and should be a concern for all nations.  We urge the Russian Federation to recognise the results of the election, complete the withdrawal of its military forces on the border with Ukraine, stop the flow of weapons and militants across the border and to exercise its influence among armed separatists to lay down their weapons and renounce violence. We call on the Russian Federation to meet the commitments it made in the Geneva Joint Statement and cooperate with the government of Ukraine as it implements its plans for promoting peace, unity and reform.

28.   We confirm the decision by G-7 countries to impose sanctions on individuals and entities who have actively supported or implemented the violation of Ukraine’s sovereignty and territorial integrity and who are threatening the peace, security and stability of Ukraine. We are implementing a strict policy of non-recognition with respect to Crimea/Sevastopol, in line with UN General Assembly Resolution 68/262. We stand ready to intensify targeted sanctions and to implement significant additional restrictive measures to impose further costs on Russia should events so require.

29.   The projects funded by the donor community to convert the Chernobyl site into a stable and environmentally safe condition have reached an advanced stage of completion. While recognizing the complexity of these first of a kind projects, we call upon all concerned parties to make an additional effort to bring them to a satisfactory conclusion and call upon project parties to keep costs under control. This remains a high priority for us.

Syria

30.   We strongly condemn the Assad regime’s brutality which drives a conflict that has killed more than 160,000 people and left 9.3 million in need of humanitarian assistance. We denounce the 3 June sham presidential election: there is no future for Assad in Syria. We again endorse the Geneva Communiqué, which calls for a transitional governing body exercising full executive powers and agreed by mutual consent, based on a vision for a united, inclusive and democratic Syria.  We strongly condemn the violations of international humanitarian law and human rights and indiscriminate artillery shelling and aerial bombardment by the Syrian regime. There is evidence that extremist groups have also perpetrated grave human rights abuses. All those responsible for such abuses must be held to account. We welcome the commitment of the National Coalition and Free Syrian Army to uphold international law.  We deplore Russia and China’s decision to veto the UN Security Council (UNSC) Resolution draft authorising referral to the International Criminal Court and demanding accountability for the serious and ongoing crimes committed in Syria.

31.   We are committed to supporting the neighbouring countries bearing the burden of Syrian refugee inflows and deplore the failure to implement UNSC Resolution 2139 on humanitarian assistance. We urge all parties to the conflict to allow access to aid for all those in need, by the most direct routes, including across borders and conflict lines, and support further urgent action by the UNSC to that end. In our funding we decide to give particular support to humanitarian actors that can reach those most in need, including across borders. We call for the international community to meet the enormous funding needs of the UN appeals for Syria and its neighbours. We resolve to intensify our efforts to address the threat arising from foreign fighters travelling to Syria. We are deeply concerned by allegations of repeated chemical agent use and call on all parties in Syria to cooperate fully with the Organisation for the Prohibition of Chemical Weapons (OPCW) fact-finding mission. We call on Syria to comply with its obligations under UNSC Resolution 2118, decisions of the Executive Council of the OPCW and the Chemical Weapons Convention to ensure the swift removal of its remaining chemical stockpile for destruction, and to destroy its production facilities immediately and answer all questions regarding its declaration to the OPCW.

Libya

32.   We reaffirm our support for a free, prosperous and democratic Libya which will play its role in promoting regional stability.  We express serious concern at the recent violence and urge all Libyans to engage with the political process through peaceful and inclusive means, underpinned by respect for the rule of law.  We urge continued and coordinated engagement by the international community to support the Libyan transition and efforts to promote political dialogue, in coordination with the UN and with the UN Support Mission in Libya fulfilling its mandate in that respect.   We ask all in the international community to respect fully Libyan’s sovereignty and the principle of non-intervention in its affairs. In this framework, we commend the proposal of the High National Electoral Commission, endorsed by the General National Congress, to convene the elections on June 25. We emphasise the importance of these elections in restarting the political process and appreciate the vital work of the Constitution Drafting Assembly.

Mali and Central African Republic

33.   We welcome the ceasefire signed on May 23 by the Malian Government and armed groups in the North of Mali, thanks to efforts by the African Union, through its Presidency, and the UN. We reaffirm our strong commitment to a political solution and to an inclusive dialogue process that must start without delay, as prescribed by the Ouagadougou agreement and UNSC decisions. We fully support the United Nation’s Multidimensional Integrated Stabilisation Mission in Mali efforts in stabilising the country and, with the commitment of neighbouring countries, including Algeria, Mauritania and the Economic Community of West African States, in working for a durable settlement respectful of the unity, territorial integrity and national sovereignty of Mali.

34.   We commend the role played on the ground in the Central African Republic by the AU-led International Support Mission to the Central African Republic, together with the forces sent by France and the European Union, to support the transition and encourage the Transitional Authorities to take urgent concrete steps toward holding free, fair, transparent and inclusive elections. We fully support the UN efforts in the areas of security, reconciliation, preparation of the elections, and humanitarian assistance.

Iran

35.   We reaffirm our strong commitment to a diplomatic resolution of the Iranian nuclear issue and welcome the efforts by the E3+3, led by High Representative Ashton, and Iran to negotiate a comprehensive solution that provides confidence in the exclusively peaceful nature of Iran’s nuclear programme. We underline the importance of the continuing effective implementation by the E3+3 and Iran of the Joint Plan of Action. We call on Iran to cooperate fully with the International Atomic Energy Agency on verification of Iran’s nuclear activities and to resolve all outstanding issues, including, critically, those relating to possible military dimensions.   We strongly urge Iran to fully respect its human rights obligations. We call on Iran to play a more constructive role in supporting regional security, in particular in Syria, and to reject all acts of terrorism and terrorist groups.

North Korea

36.   We strongly condemn North Korea’s continued development of its nuclear and ballistic missile programmes.  We urge North Korea to abandon all nuclear weapons and existing nuclear and ballistic missile programmes and to comply fully with its obligations under relevant UNSC resolutions and commitments under the September 2005 Joint Statement of the Six-Party Talks. We call on the international community to implement fully UN sanctions. We reiterate our grave concerns over the ongoing systematic, widespread and gross human rights violations in North Korea documented in the report of the UN Commission of Inquiry, and urge North Korea to take immediate steps to address these violations, including on the abductions issue, and cooperate fully with all relevant UN bodies. We continue to work to advance accountability for North Korea’s serious human rights violations.

Middle East Peace Process

37.   We fully support the United States’ efforts to secure a negotiated two-state solution.  We regret that greater progress has not been made by the parties and urge them to find the common ground and political strength needed to resume the process. A negotiated two-state solution remains the only way to resolve the conflict. We call on both sides to exercise maximum restraint and to avoid any unilateral action which may further undermine peace efforts and affect the viability of a two-state solution.

Afghanistan

38.   We renew our long-term commitment to a democratic, sovereign, and unified Afghanistan and our enduring partnership with the Government of Afghanistan based on the principles of mutual respect and mutual accountability. The first round of presidential elections and the provincial council elections marked a historic achievement, especially for the more than 2.5 million women who voted, and we look forward to the completion of the electoral process. We continue to assist the Government of Afghanistan to strengthen their institutions of governance, reduce corruption, combat terrorism, support economic growth, and counter narcotics.  We continue to actively support an inclusive Afghan-led and Afghan-owned process of reconciliation.

Maritime Navigation and Aviation

39. We reaffirm the importance of maintaining a maritime order based upon the universally-agreed principles of international law. We remain committed to international cooperation to combat piracy and other maritime crime, consistent with international law and internationally recognised principles of jurisdiction in international waters. We are deeply concerned by tensions in the East and South China Sea. We oppose any unilateral attempt by any party to assert its territorial or maritime claims through the use of intimidation, coercion or force. We call on all parties to clarify and pursue their territorial and maritime claims in accordance with international law. We support the rights of claimants to seek peaceful resolution of disputes in accordance with international law, including through legal dispute settlement mechanisms.  We also support confidence-building measures. We underscore the importance of the freedom of navigation and overflight and also the effective management of civil air traffic based on international law and International Civil Aviation Organization standards and practices.

Other Issues

40.   We reaffirm our commitment to the protection and promotion of all human rights and fundamental freedoms, including religious freedom, for all persons. We recognise the need to show unprecedented resolve to promote gender equality, to end all forms of discrimination and violence against women and girls, to end child, early and forced marriage and to promote full participation and empowerment of all women and girls. We look forward to the Global Summit to End Sexual Violence in Conflict taking place in London later this month.

41.   We reiterate our condemnation of terrorism and our commitment to cooperate in all relevant fora to prevent and respond to terrorism effectively, and in a comprehensive manner, while respecting human rights and the rule of law. We condemn the kidnapping of hundreds of schoolgirls by Boko Haram as an unconscionable crime and intend do everything possible to support the Nigerian government to return these young women to their homes and to bring the perpetrators to justice.

42.   We confirm that non-proliferation/disarmament issues remain a top priority and welcome the G-7 Non-proliferation Directors Group statement issued today.

Conclusion

43.    We look forward to meeting under the Presidency of Germany in 2015.