We’re all aware that the intensity and scale of the very different events that have succeeded one another since January - from the Ivorian crisis to the Arab Spring, the Japanese disasters to the fighting in Libya, not to mention the debt crisis - make this an exceptional year.

The time has come to fully evaluate these events and what they mean for France, for the European Union and for the G20.

I am happy to do so in your presence, Ambassadors - you who have so effectively implemented and explained the actions our country has taken under the authority of the Ministre d’Etat, my friend Alain Juppé.

AFRICA/DEMOCRACY/ECONOMIC GROWTH

I want to begin with Africa. 2011 will no doubt go down in history as a year of major progress for democracy on the African continent.

First south of the Sahara, with the recognition of President Ouattara’s election in Côte d’Ivoire, ending 10 years of upheaval; next in Guinea, who held her first democratic election since independence, resulting in the victory of President Alpha Condé; and then in Niger, where, following an exemplary transition, the election of President Issoufou marked the return of constitutional order. In all, more than 20 major elections will have taken place throughout sub-Saharan Africa this year.

Such progress on the democratic front leads to progress on peace. In Sudan, it was the overwhelming and freely expressed will of all the populations concerned that brought an end to a civil war lasting more than 20 years and gave rise to a new, still-fragile state: South Sudan. This progress makes the Somali crisis and the famine striking the Horn of Africa all the more unacceptable. The entire world must do more to bring an end to these tragedies.

The progress of democracy also goes hand in hand with development. For 15 years now, the economies of Africa have grown more than 5% annually. How many people know that between 2001 and 2010, six of the 10 economies that experienced the strongest rate of growth were African? How many realize that the continent’s population will double by 2050? At that point, Africa will be more populous than China.

For France, these two facts offer good reasons for making Africa’s economic take-off a real priority for Europe. The proximity of the African continent represents an opportunity for our economies.

France wants to be alongside this Africa on the move. She wants to accompany it on its march towards democracy and development. She wants to build with it a balanced, modern partnership. The Charter for French Companies in Africa launched at the Nice summit and the new defence agreements reached with certain states - agreements that are finally transparent - have laid the groundwork. But we must go still further!

Let’s stop focusing on what’s wrong! The African continent is taking off! It represents the youth of the world!

ARAB SPRING/EU/UfM

North of the Sahara, it was indeed the young people who set the Arab Spring in motion. First in Tunisia and then in Egypt, it spread from one country to another, from the Maghreb to the Mashriq.

What were these young people saying, almost in unison? They weren’t saying «Down with the West” or «Down with America,” or even «Down with Israel”. They were demanding freedom and democracy, respect and dignity. They showed that in our interconnected world, people have the same expectations on the northern and southern shores of the Mediterranean. They showed that there is no «Arab exception” condemning people to dictatorship, but rather universal values.

This democratic earthquake has at times been compared to the fall of the Berlin Wall and the collapse of the communist bloc. In terms of its historical significance, that’s a valid comparison. But I see three differences that make this series of events even more complex.

The first difference is demographic. The countries of the Soviet empire had completed their demographic transition. In the Arab world, it is only just beginning. There the youth represent two-thirds of the population, sending millions of young people - often qualified - onto the job market each year.

The second difference relates to the extinction in 1990 of the last of those ideologies that brought the 20th century to grief, allowing democracy to flourish throughout the European continent. South of the Mediterranean, where religion remains a central reference, the major challenge of the Arab Spring is to show by example that the affirmation of these values is in no way opposed to Islam. Laying the roots of democracy involves holding free elections, of course, but it also means accepting changes of administration and respecting the rights and choices of individuals and minorities.

The third difference is that for the countries of Central and Eastern Europe, the path to take was laid out before them: European integration. On the southern shores of the Mediterranean, that’s obviously not the case. This highlights the importance of the partnerships that must be developed while respecting the independence and sovereignty of the nations concerned. At the Deauville summit, the G8 made a strong, long-term commitment in that regard, proposing $40 billion for Tunisia and Egypt between 2011 and 2013, along with making available the EBRD and its unique expertise.

Since Deauville, two other countries have joined this partnership: Morocco and Jordan. They are showing that real reform can achieve results that are as significant as revolutions.

It goes without saying that if the new Libya wanted to join the Deauville Partnership, she would be most welcome! Tomorrow, we will welcome here at the Elysée the new authorities from Tripoli. With all the countries represented, with the UN, the Arab League and the African Union, we will turn the page of dictatorship and fighting, and open a new era of cooperation with democratic Libya.

But beyond that, is there anyone who doesn’t see the relevance of the Union for the Mediterranean when it comes to meeting the expectations of these peoples? The time has come to revive and re-establish the UfM, and in the coming weeks France will present her proposals to her partners in that regard. The deadlocked peace process must not prevent the UfM from being the engine of a true Mediterranean renaissance!

FRENCH ROLE

During these events, France, more than other countries, was questioned and criticized. That is the price of history: here, she was doing too much, at the risk of being accused of «neo-colonialism”; there, not enough and not quickly enough; and there, blamed for shameful indifference!

With a little distance, I believe that everyone will acknowledge that France was the most engaged country, following clear principles - principles underpinning our country’s new policy.

One obvious thing to remember is that the people make history; only they can take their destiny in hand. And while the desire to move towards freedom and democracy is predictable, no one can anticipate when it will break out, much less provoke it from abroad.

What’s new, after decades during which the stability of regimes already in place trumped everything else, to both the east and south of Europe, is that France is determined to resolutely support the peoples’ movements towards democracy.

That is the aim of our initiatives involving the G8’s Deauville Partnership and in the framework of the European Union.

COTE D’IVOIRE/LIBYA/SYRIA

It has also been the aim of our military actions in Côte d’Ivoire and Libya.

France, to her credit, took the initiative and led the way at two decisive junctures: first in Côte d’Ivoire, when the outgoing president, refusing to accept the results of balloting validated by the African Union and the United Nations, wanted to stay in power through terror and massacres; and then in Libya, when people demanding freedom were threatened with being crushed by Gaddafi’s cannons, tanks and planes.

France’s choices were just, politically and morally. We also made sure to act with the full support of the Arab League and our African Union partners. And of course, we acted on the basis of an explicit mandate from the UN Security Council.

We upheld respect for international law - not with words but with deeds. By rallying the Security Council on these two crises, we gave concrete form for the first time to a principle of action that France succeeded in getting adopted by the UN in 2005: the responsibility to protect.

For the first time, at our behest and on two occasions, in Côte d’Ivoire and in Libya, the Security Council authorized the use of force to protect populations under attack from their own leaders. And for the first time, that same Council unanimously agreed to refer the crimes of Libyan leaders to the International Criminal Court.

One might say to us - and justifiably so - what about the massacres in Syria? I regret that the Security Council still has not shouldered its responsibilities with respect to the Syrian tragedy. But those in power in Damascus would be wrong to believe they are protected from their own people. The Syrian President’s action is beyond repair. France and her partners will do everything legally possible to ensure the triumph of the Syrian people’s aspirations for freedom and democracy.

Together with the European Union, France has already assumed her responsibilities by imposing sanctions on the perpetrators of the crackdown in Syria, as she did in Iran when the enormous popular movement of 2009 was crushed by force.

FRANCE/NATO/LIBYA

Another lesson must be drawn today from our intervention in Libya. I want to talk about France’s return to NATO’s integrated command. What didn’t I hear when that decision was taken! France would lose her independence! Her image would be destroyed in the Third World! The evidence has shown that wasn’t the case.

NATO turned out to be a crucial tool in the service of our military operations. As the United States did not want to be too heavily involved in Libya, for the first time since 1949 NATO was placed at the service of a coalition led by two determined European nations, France and the United Kingdom. That was possible only because we assumed our full rule within the integrated command.

Better yet, I would remind those who predicted negative reactions from the Arab world that three countries - the United Arab Emirates, Qatar and Jordan - participated in the coalition’s operations from the beginning. As for our Libyan friends, every day they clamoured for more NATO actions!

The fighting in Libya provided the best response to prophets of the «clash of civilizations and religions”: side by side, Arab, European and North American forces helped a suffering people fulfil its yearning for freedom.

EUROPEAN DEFENCE/AFGHANISTAN

One last lesson must be drawn from the Libyan crisis, and it relates to Europe. In this crisis, through the initiative of France and the United Kingdom, the Europeans demonstrated for the first time that they were capable of intervening decisively, with their allies, in a conflict on their doorstep. That is remarkable progress, compared with the wars in Bosnia and Kosovo.

That said, we can’t ignore the facts: beyond Libya, Europe is threatened by a «strategic contraction”. What are we seeing? A continued drawdown in defence efforts; the evocation of soft power, a screen for surrendering responsibility; and all too often, a blindness to threats.

But the world is changing. President Obama has presented a new vision of American military involvement whose implication is that the Europeans must assume more of their responsibilities. If we don’t draw the consequences from that, if we don’t consider the realities in the world, the Europeans will experience a rude awakening.

Europe will have no defence worthy of the word without robust military capabilities and real industrial and technological policies. These facts are at the heart of the decisions taken by the European Council during the 2008 French presidency and of the Franco-British partnership. France and the United Kingdom alone represent half the [EU’s] defence budget and two-thirds of the defence research budget. United, as never before, since the Lancaster House treaty, our two countries are practically the only ones in Europe to meet the [NATO] standard of allocating 2% of their GDP to defence.

Much remains to be done before Europe can live up to the ambition it set for itself. But France remains determined to shoulder all of her responsibilities.

That is what we are doing in Afghanistan. We can be proud of the work our soldiers and aid workers have accomplished in Surobi and Kapisa over the past three years. Ten years after 11 September, progress on the ground and the increased strength of Afghan forces have made it possible to begin handing over security responsibilities and planning the withdrawal of a quarter of our troops in the coming months. By the end of 2014, the Afghan forces will have taken over responsibility for their country’s security.

Aware that they can’t win militarily on the ground, the Taliban are increasingly resorting to acts of terrorism. They strike blindly, hoping we can be made to give up. We will not give up.

The transition decided by the Afghans and the 48 countries belonging to the coalition will be implemented. It will profoundly alter the shape of our commitment to the Afghan people, which will remain essential. We must prepare for it. It will be the topic of a meeting in Bonn this December. It is the focus of the French-Afghan treaty signed with President Karzai.

It will enable us to shepherd efforts towards national reconciliation with insurgents who renounce terrorism and respect the constitution. Such a reconciliation will be possible only if neighbouring countries respect Afghanistan’s sovereignty and security.

But let’s be clear: progress in Afghanistan does not mean the end of the terrorist threat. The death of Bin Laden is a great victory for which President Obama deserves congratulations. But even weakened, al-Qaeda remains present. This is true notably in Pakistan, where developments are troubling. It is true as well in the Arab world and in Africa. Now more than ever we must remain vigilant, and the French authorities remain fully mobilized to obtain the release of all our hostages.

IRAN

The other country I want to talk about is Iran. Her military, nuclear and ballistic ambitions represent a growing threat. They could lead to a preventive attack on Iranian sites, which would spark a major crisis. Iran refuses to negotiate seriously and is engaging in new provocations. The international community can provide a credible response to this challenge if it demonstrates unity and firmness and imposes even harsher sanctions. We would be mistaken to underestimate their effects; they are increasingly noticeable.

MIDDLE EAST PEACE PROCESS

This new context, which combines the hopes inspired by the Arab Spring with threats from the Sahel to Iran, does not in any way detract from the relevance of the old crises, starting with the Israeli-Arab conflict. On the contrary, it makes a settlement more urgent.

The only real security is peace. It’s primarily through the creation of the Palestinian state that we will achieve it. And Israel, who has an unalienable right to existence and security, will be the main beneficiary.

The parameters of the settlement are known; President Obama recently reiterated them very effectively. It’s on this basis that the peace negotiation must be relaunched and all parties must understand that it is in their interest.

If we don’t succeed, the member states of the United Nations will be called upon to take a position on the state of Palestine in a few weeks’ time in New York. I hope that the 27 countries of the European Union will speak with one voice and that together we will assume our responsibilities. France is working towards this.

But whatever the result of this vote, we will then be faced with a peace process that needs to be rebuilt. I therefore hope that before embarking on a new round of failed attempts and missed opportunities, we will seriously question our negotiating method. As I’ve said on previous occasions: it must change.

The role of the United States is indisputable and essential, but everyone knows that it’s not enough. We must expand the negotiating circle, examine the role and the relevance of the Quartet, give everyone the place they deserve in terms of their relations with the parties. We should bear in mind that the European Union is Israel’s top economic partner and the leading aid donor to the Palestinians.

France will make specific proposals on this to the main actors in the region, to the United States and of course to her European partners. The prolonged and dangerous deadlock in the peace process, as well as the developments in the Arab world, underline the urgent need for this.

EURO AREA CRISIS/RESPONSE

In order to bring all of its political weight to bear in world affairs, the European Union must firstly remain the leading economic power. That’s why the Europeans must resolutely continue the actions that they’ve undertaken to balance their accounts and consolidate their growth.

The euro is a key issue: let’s not forget that it represents almost 30% of global foreign exchange reserves. In 10 years it has established itself as a strong and stable currency. The Euro Area is not the sick man portrayed by some people but an area of wealth and prosperity; an essential focal point for the global economy; a driving force that provides the basis for European integration.

The crisis we’re experiencing affects all the advanced economies. It’s a direct consequence of the financial and economic crises of 2008 and 2009. The decisions that we took then, in Europe and within the G20, to save the global financial system and to restart growth were essential in order to avoid a major collapse. But they led to increased deficits and public debt.

The situation is, incidentally, less troubling in the Euro Area than elsewhere: public debt amounts to 85% of GDP in the Euro Area, compared with 100% in the United States and 200% in Japan; and the measures to control government deficits are more effective in the Euro Area: in 2012, the government deficit in the Euro Area relative to GDP will be lower than that of the United States, the United Kingdom and Japan.

The fact remains that several countries in the Euro Area are experiencing excessive debt and a loss of competitiveness. Remarkable progress is under way in Ireland and Portugal. I also want to commend the efforts of the Greek people, and the determination of their government.

Beyond these countries, Spain and Italy have been the victims of an unprecedented wave of speculation during the summer, while the fundamentals of these two economies in no way justify such attacks. At this point I would like to commend the courageous measures undertaken by these two countries.

I want to say to the speculators that we won’t allow them to run riot without a response from us. We will take all necessary measures to strengthen the Euro Area. For by defending the euro, we’re defending Europe, as well as our prosperity, and the savings and the purchasing power of French citizens.

Let’s be clear: this crisis has also highlighted the shortcomings of our economic and monetary union. Obviously, the single currency must be combined with the further integration of our economies, improved coordination of our economic and budgetary policies, and coherent institutional architecture allowing us to take the necessary decisions effectively.

Major progress has been made in this direction in the course of the last year:

Thanks to the Stability and Growth Pact, which reinforces budgetary discipline and the coordination of macroeconomic policies.

Thanks to the adoption of a Euro Plus Pact which will mobilize our resources in order to increase our competitiveness.

Lastly, thanks to the laying of the foundations for a genuine European Monetary Fund, with the strengthening of the current European Financial Stability Facility and the creation of the future European Stability Mechanism, as called for by France.

These are major advances. They were unimaginable just 18 months ago. The crisis situation means that we haven’t been able as yet to gauge them fully, especially since their initial impact won’t be felt for a few weeks or months.

But we must go further. Faithful to their historic mission and mindful of their responsibilities, France and Germany undertook initiatives when I met Chancellor Merkel on 16 August.

We propose that the Euro Area be based on two pillars:

The first pillar is genuine economic government. It will be given form at the summit of the heads of state and government of the Euro Area, which will meet at least twice a year, and more often if necessary. It will have a stable president appointed for two and a half years. France has long called for this; it will soon become a reality.

The second pillar is greater coordination and oversight of economic policies within the Euro Area. In addition to the progress that I highlighted, France and Germany would like all states in the Euro Area to include in their constitution a rule relating to the balancing of public finances. This is an essential tool for ensuring the long-term credibility of our European commitments with respect to public finances. As a result of this issue, the effectiveness and credibility of the states’ actions, the actions of all the states in the Euro Area, are at stake.

Lastly, France and Germany have decided to strengthen their economic integration. We’ll make progress towards fiscal convergence by working on a common corporate tax whose rates and tax bases will be harmonized by 2013.

The 50th anniversary of the Elysée Treaty in January 2013 should be the opportunity to reach a further milestone with respect to the convergence of our economies in support of growth and employment.

SCHENGEN AREA

After the euro, the greatest European achievement is undoubtedly free movement within the Schengen Area. But let’s be clear, the removal of internal borders is feasible only if the external border, which is now a common border, is secure. Make no mistake: in the face of migratory pressure, if the external border of the Schengen Area isn’t maintained, then the Schengen Area won’t survive.

In order to preserve the Schengen Area, France proposed developing a system to jointly manage the external border. We must strengthen European instruments such as Frontex. We must implement an effective inspection system. We must be able to reinstate border controls at the borders of a state if it is unable to secure its portion of the external border. These innovations, called for by France, were approved by the European Council. They must now be implemented through the adoption, notably at the European Parliament, of the necessary legal texts. With respect to this fundamental issue, everyone must assume their responsibilities.

EU FOOD/INDUSTRIAL/TRADE POLICIES

Beyond the euro and the Schengen Area, the European Union must strengthen its action in several key areas:

I’m thinking of agriculture and food security, which are two priorities of our action within Europe, as well as for the G20 in Cannes.

I’m thinking of industrial policy, which is no longer a taboo subject among the 27.

I’m thinking of international trade, which must be based on a simple principle: that of reciprocity and fair trade.

On all these issues, Europe must lead the way. If it is united and resolute, it has every chance of being heard since it represents 30% of global GDP and 60% of Official Development Assistance.

GLOBAL GOVERNANCE/ECONOMIC RECOVERY

For 60 years, the European Union has been developing a new form of collegial governance based on compromise. Today, Europe still remains the main proactive force with respect to building the world order for the 21st century, often on France’s initiative.

It was France who proposed creating the G7/G8 in 1975; and in 2008 it was France who, on behalf of the EU, proposed convening the summit which was to become the G20. It is France who has the honour of holding the presidency this year of the G8 and the G20. Yet experience has shown that these two informal groups alone are able to give the necessary impetus to deal with the global problems of our time and implement a more just and more effective world order.

Much was said when we proposed the work topics for the two summits! Over-ambitious! Unacceptable interference in the Internet, which would develop perfectly well on its own! Interventionist policies with respect to commodity markets, which would have no problem functioning!

Today, no one disputes the proposed topics.

At the G8 Summit in Deauville the results met with our expectations, whether with respect to the partnerships with Africa and the Arab Spring; or with respect to the Internet: for the first time, the heads of state and government of the main countries concerned adopted a joint declaration establishing the principles for the development of this major phenomenon of our time. I hope that next year’s American G8 presidency will allow further progress to be made.

The G20 summit in Cannes in two months will be a crucial moment with respect to signalling new progress in terms of the economic and financial cooperation between partners who account for 85% of global GDP.

In the face of sovereign debt crises, fears relating to world growth, market instability and volatility in commodity prices, international cooperation within the G20 is even more necessary now than it was in 2008.

Our main objective is to consolidate the global economic recovery. Growth is essential to creating jobs, to lifting billions of human beings out of poverty, to reducing deficits and debt.

The markets have lost their bearings: they demand both the reduction of deficits and debt, but in the short term they’re worried about the impact of deficit reduction on growth.

Austerity measures at the global level would be worse than the problem itself. They would threaten the recovery and could plunge us back into recession. Deficit and debt reduction, which is essential, must be gradual and above all credible. Rather than reducing immediate expenditure which would have a negative impact on growth, we must introduce the reforms necessary to strengthen the sustainability of our public finances over the medium term. That’s the whole point of the pension reform that we’ve undertaken in France. Above all, our strategies must be credible: they must be part of a medium-term framework such as the Golden Rule, which has, according to IMF figures, already been adopted by 80 countries around the world.

This strategy will work only if it’s combined with the rebalancing of global demand and growth. In this context, the emerging countries have a very important role to play. Consider that in China private consumption represents only 35% of GDP compared with 60% in the Euro Area and 70% in the United States.

In order to reduce global imbalances, these countries must shift the balance of their development model towards domestic demand. This is an issue that I brought up in a positive atmosphere with President Hu last week during my visit to Beijing.

In Cannes we want the G20 to agree on an action plan for growth, including specific and concrete commitments by the leading economies.

The issue of macroeconomic imbalances can’t be separated from the reform of the international monetary system. This issue was central to the debates of the past year; some people even spoke of a currency war. Everyone now feels that the lack of a balanced and representative international monetary system is detrimental to the global economy. Since the conference in Nanjing we’ve made a great deal of progress. We now have a precise and concrete agenda defined by the French presidency.

IMF REFORM

The international monetary system must first and foremost be more representative of the current global economy. The SDR [Special Drawing Rights] must be able to include new currencies. We must then improve our instruments to combat financial crises. IMF oversight must be improved and we must provide it with the necessary means to deal with systemic crises. Isn’t it time to consider allowing those countries with a surplus to invest part of their reserves in the IMF in order to strengthen its capacity? Lastly, we must agree on common recommendations regarding the management of capital flows.

I hope that on all these issues, the finance ministers will be able to agree on concrete proposals in preparation for the Cannes summit.

COMMODITY MARKET REGULATION

I also spoke to you last year about the regulation of commodity markets. The action plan adopted in June by the G20 agriculture ministers takes up the main challenge: that of production. The famine in the Horn of Africa, which required emergency action with the FAO, and the suffering of almost a billion humans as a result of constant malnutrition are outrageous; but these outrages will cease only when the world reinvests in agricultural production on a massive scale.

An ambitious agenda with respect to market transparency and derivatives regulation is also required. We need to define rules for the agricultural derivatives markets that are comparable to those in effect for the financial markets, with sanctions for the abuse of a dominant market position.

DEVELOPMENT/CANNES SUMMIT

The French presidency wanted to make development a top priority for the G20. It’s a prerequisite for its legitimacy. But it’s also, above all, in everyone’s interest to reduce poverty and development gaps between nations. The Cannes summit will focus on food security and concrete infrastructure projects.

But I wanted the G20 to discuss development financing as well. Given how difficult it is for the developed countries to increase public assistance, and given the scope of the challenges to be met in the most vulnerable countries, everyone knows that innovative financing is a necessity. I have long championed the creation of a tax on financial transactions. During my meeting with Chancellor Merkel on 16 August, we decided that France and Germany would present a proposal to their European partners in September. Our objective is for Europe to set an example of what can be done, so that the others rally to this initiative in Cannes. During the next two months, I want you to very actively champion this idea in the countries where you are posted. France is and will remain in the vanguard of the fight on behalf of the poorest of the poor.

INTERNATIONAL INSTITUTIONAL REFORM

In Cannes, it is also the new world order that will move forward. The G20’s legitimacy derives from its effectiveness, its ability to decide. But the implementation of decisions must come about through the organizations that bring together the entire community of nations.

Reforms, to be completed, of the international financial institutions must be complemented by those of the other organizations that are responsible for implementing the G20’s decisions: the WTO, the ILO and the FAO, to mention just three examples. Thus, one after another, the entire multilateral system that came into being in 1945 will adapt to the demands of the 21st century by better integrating social progress and environmental protection into global governance.

GLOBALIZATION

Globalization is the dominant phenomenon of our time. Its effects now extend to every sphere of activity, to all parts of our planet. The resulting interconnection of economic, financial, social, political and environmental systems at the global level is accompanied by increased instability and growing vulnerabilities.

As we face these risks, there is but a single response: solidarity and a spirit of responsibility. That is the path France proposes to her EU partners and to the G20. With one conviction: if we are divided, incapable of taking the necessary decisions, we will head straight towards consequences that will be tragic for us all.

Standing together, the Europeans can make their EU an unparalleled centre of wealth and influence.

United, the countries of the G20 can establish new world governance and essential rules for making the 21st century a century of unprecedented shared prosperity.

Thank you.

Nicolas Sarkozy