World needs G3 for better co-op among top three economies: Dominique de Villepin

Dominique de Villepin speaks on Launching of Dagong Global Infrastructure Credit Rating Methodology & Infrastructure Investment and Financing Forum.[Photo provided to chinadaily.com.cn]

We need better cooperation among the three main global currencies: the dollar, euro and yuan, says former prime minister of France Dominique de Villepin in an exclusive interview with China Daily website.

The interview was done through “ Launching of Dagong Global Infrastructure Credit Rating Methodology & Infrastructure Investment and Financing Forum” which is jointly held in Beijing by Dagong Group, an emerging international credit rating agency and Global Infrastructure Basel (GIB) Foundation.

Could you share your view on the infrastructure credit rating methodology to be launched this time?

I think that it’s a very innovative approach that Dagong has initiated with this new methodology. For the first time, we’re going to have new tools allowing us to appreciate the quality of the different investment in infrastructures, the quality of financial project and the quality of companies. It will allow to guide capital flows towards the best projects. This is something very new and adapted to the challenges. Many infrastructure projects will be implemented all along the One Belt One Road in Asia, South East Asia, Central Asia and Caucasus in the coming years. For the first time, the new rating methodology promoted by Dagong in a more comprehensive way with the help of new technologies will give access to relevant and multidimensional criteria to evaluate precisely all different risks.

Among all the issues to be discussed in this year’s G20 Summit in Hangzhou, which topic do you care most about?

The most important issue is to build new tools in order to ensure the financial stability. This requires to innovate and to create new instruments. That’s why I really believe we need a new financial system.

First, a better cooperation has become necessary between the three main world currencies: the dollar, the euro and the yuan. I do believe that we need a G3 as a new institutional way to improve cooperation among the three main economic regimes. This G3 will be a strong cooperative architecture organized at governments and Central Banks levels to respond to major crisis situation and to coordinate monetary policies.

Second we need a new tool to assess risk, and that’s why I think we need a more balanced credit rating system. As a matter of fact, the existing system dominated by the US Big Three is not only unfair, but inefficient as we witnessed during the 2008 crisis. Because of its development, Asia needs its own credit rating system to support a more stable financial order.The question is: how can we create new capacities and express innovative ideas that help us to address the challenges of the global economy. The world economy is in a new situation, the growth is slowing down all around Eurasia, in Europe, in China, in Russia. That’s why we have to search for new engines for growth. Of course One Belt and One Road is giving us a very strong perspective, opening towards stability and prosperity. But for that, it is crucial to make it a shared project. The AIIB is an emblematic example of this approach, with 57 members and its concrete work to foster infrastructure development in Asia. We have to be innovative, creative, if we want to address the current situation of world economy.