POLICY COMMITMENTS BY 

G20 MEMBERS

LOS CABOS SUMMIT, JUNE 18-19, 2012
INDEX

Page

ARGENTINA...................................................................................................................................... 1

AUSTRALIA ....................................................................................................................................... 4

BRAZIL ............................................................................................................................................. 7

CANADA ........................................................................................................................................... 9

CHINA ........................................................................................................................................... 12

EUROPEAN UNION / EURO AREA................................................................................................... 17

FRANCE........................................................................................................................................... 20

GERMANY....................................................................................................................................... 22

INDIA ........................................................................................................................................... 25

INDONESIA ..................................................................................................................................... 26

ITALY ........................................................................................................................................... 29

JAPAN ........................................................................................................................................... 32

SOUTH KOREA................................................................................................................................ 34

MEXICO .......................................................................................................................................... 36

RUSSIA ........................................................................................................................................... 38

SAUDI ARABIA ................................................................................................................................ 40

SOUTH AFRICA ............................................................................................................................... 43

SPAIN ........................................................................................................................................... 45

TURKEY........................................................................................................................................... 48

UNITED KINGDOM ......................................................................................................................... 51

UNITED STATES .............................................................................................................................. 54
Table: Policy Commitments by G20 Members ARGENTINA

1

ARGENTINA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Primary fiscal result compatible with a 

decreasing debt-to-GDP ratio

Keep increasing public sector 

solvency

2011 finished with a primary surplus of 0.3% of GDP. 

National Public Debt reached 42.7% of GDP in 3rd 

quarter 2011, 1.4 p.p. below the previous quarter and 

4.4 p.p. below the same quarter of 2010.

The Provincial Debt Relief Program (created in 2010) 

has been extended until 2013. This plan allows the 

most indebted provinces to refinance their debt with 

the National State in favourable conditions.

Reduce subsidies on household energy 

consumption and public transportation 

by means of a focused approach with 

the aim of protecting lower-income 

families. 

To reduce the fiscal cost of 

subsidies and free resources for 

infrastructure investment, as 

well as to improve the 

distribution of income by 

channelling subsidies exclusively 

to lower-income households. 

This policy has begun to be implemented, starting with 

the elimination of subsidies for higher-income 

households. 

To apply countercyclical fiscal policies 

in case the international economic 

situation deteriorates further.

To offset the negative impact of 

extremely adverse international 

conditions.

The National Government has a solid fiscal position, as 

evidenced by its primary surplus and a declining 

debt/GDP ratio. This fiscal strength would allow it to 

use fiscal tools in order to preserve employment and 

production, if necessary.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Provide central bank funding to banks 

for long-term investment projects by 

attenuating maturity mismatch. Up to 

ARS8bn will be allocated (10% of total 

corporate loans of the banking 

system). /2011-2013

To increase the financing of 

both infrastructure and private 

sector real investment in order 

to augment the rate of growth 

of potential output. 

In 2011 ARS 4bn were disbursed (representing 5% of 

total corporate loans).

Increase Financial depth and equality

through the diffusion of free savings 

accounts for low-income households 

and instant electronic transfers./2012-

2015

Increase the private credit to 

GDP ratio from 11,7% of GDP in 

2011 to 16-18% in 2015 and 

promote a more widespread 

access to financial services.

In December 2011, the Credit to GDP ratio reached 

14.4%, increasing 2.7 pp. on a year-over-year basis. 

The BCRA has been promoting the use of electronic 

means of payment through the implementation of a 

universal free bank account with an associated debit 

card, and the reduction of inter-bank transfer costs. 

There was an expansion of 35% of money transfers of 

small amounts in the last year. 101.400 Universal Free 

Accounts were created since the implementation of 

this program in the end of 2010. 

Under a new regulation that promotes a wider 

geographical coverage of the financial system, 84 

branches were opened through 2011. Most of them 

(67 branches) were placed in areas where the financial 

infrastructure is less developed.

As an alternative of using cash in transactions for large 

amounts the BCRA relaunched the so called “Cheque 

Cancelatorio”. In 2011 2.184 transactions were made 

totalizing ARS154 millions and 4.244 transactions 

totalizing USD 241 millions.
Table: Policy Commitments by G20 Members ARGENTINA

2

Complete the adoption of (Basel II, 

Basell II.5 and Basel III) the three Pillars 

in Basel II and the new elements in 

Basel III.

To increase banking sector 

soundness and resilience by 

upgrading the regulatory 

framework to the best 

international risk management 

practices.

The project for the adoption of Basel II is being 

implemented as from may 2011. The rules on capital 

requirements for operational risk have been put 

forward through Com.”A”5272 as from January 2012. 

As regards capital requirements for credit risk an 

advanced proposal including Basel 2.5 and Basel III 

modifications is being considered by BCRA Directors 

and impact studies are well ahead. As regards the 

provisions of Pillar 3 these will be implemented in 

2012 and Pillar 2will be put into effect in the first half 

of 2013.

As from January 2012 financial institutions must have 

in place a comprehensive risk management process 

based on the guidelines established by the Central 

Bank (Com."A"5203). This comprehensive risk 

management process must contemplate credit, 

liquidity, market, interest rate and operational risk.

In line with Basel II and III, the Central Bank of 

Argentina implemented further steps to strengthen 

bank solvency standards. A new regulation set by the 

Central Bank (com."A"5273), established that banks 

posting profits (after applying the existing regulatory 

filters) may only pay dividends if their regulatory 

capital, following the corresponding allocation, is at 

least 75% above the minimum regulatory requirement. 

The purpose of this measure is to reduce the financial 

system’s pro-cyclicality, by having a capital buffer to 

face potential financial and/or macroeconomic 

volatility episodes.

Expand the regulatory scope to include 

other institutions that directly or 

indirectly are involved in financial 

intermediation.

Strengthen financial stability. The Central Bank Charter was modified in March 2012 

by Law 26.739 extending the regulatory scope to the 

payments system, including clearing houses, and other 

institutions that directly or indirectly are involved in 

financial intermediation.

Design incentives in order to channel 

credit towards productive purposes 

and certain economic sectors, 

especially the SMEs, or less developed 

regions./ 2012-2016

Bolster economic development. The Central Bank Charter was modified in March 2012 

by Law 26.739.

Give authority (power) to the Central 

Bank to ensure a fair relationship 

between the financial institutions and 

consumers.

Protect consumers of financial 

services and foster competition 

in the banking system.

The Central Bank Charter was modified in March 2012 

by Law 26.739.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Increase food and agricultural output 

and diversify production and exports, 

as established in the Agricultural and 

Food Strategic Plan.

To increase the world ́s food 

supply, improve Argentina ́s 

external sustainability and allow 

for higher imports of capital 

goods.

Grain production did not grow in 2011 as a result of 

unfavourable climatic conditions. In spite of that, total 

land sown with cereals grew by 770.000 has (2.2%). 

There was an increase of 440.000 has. (10%) in the 

area planted with corn and an increase of 405.000 has 
Table: Policy Commitments by G20 Members ARGENTINA

3

(54%) in the area sown with barley.

Add 3227 mw of new power by 2013, 

with emphasis on technologies such as 

hydroelectric, nuclear and gas power 

stations. 

To augment energy supply and 

increase the share of green 

technologies in electricity 

generation.

In 2011 and the first quarter of 2012 ten energy 

projects have been completed, representing a total 

added capacity of 1223mw. Moreover, the Yaciretá 

dam height was raised, allowing for a gradual increase 

in capacity of up to 1000 mw. The new additions 

include both hydroelectric and eolic plants. 

In 2012 the energy supply is expected to augment by 

1630 mw, 700 of which correspond to the Nuclear 

Central Atucha II, and 30 mw to wind energy.

Continue increasing the coverage and 

the per capita allocation of social 

programs.

Reduce unemployment to 6% by 2015.

Increase drinkable water and sewage 

coverage to 90% and 75%, 

respectively, by 2015.

To reduce absolute poverty and 

improve the distribution of 

income. 

The main income transfer program, the “Asignación 

Universal por hijo”, which is directed to children under 

the age of 18, has achieved an 85% coverage rate for 

children in a vulnerable situation. In May 2011 the 

program was extended to pregnant women. 

During 2011, pensioners of the Argentine Integrated 

Retirement System increased their income by 37% and 

the minimum pension was raised by the same 

percentage. Pensions were further raised by 17.6% in 

March.

The unemployment rate fell from 7.8% in 2010 to 7,2% 

in 2011. Besides, the rate of informal employment has 

been reduced in 1 p.p. between 2010 and 2011, to 

34.2%.

The water and sanitation company (AySA) launched 

the Strategic Plan 2011-2015. National transfers to this 

public enterprise reached USD 540 million in 2011, 

which represents an increase of 229% compared to 

2010.

Moreover, the “Water and Sanitation Program for 

Urban and Suburban Centers” is being implemented, 

with a total cost of USD 250 million. 

A long-term project to clean up the MatanzaRiachuelo river basin is being implemented.
Table: Policy Commitments by G20 Members AUSTRALIA

4

AUSTRALIA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Reduce federal net debt and return budget 

to surplus by FY2012-13.

Through fiscal consolidation, 

contribute to sustainability of 

public finances, and support 

Australia’s capacity to respond 

to unanticipated events.

The 2012-13 Budget announced an estimated 

surplus of A$1.5 billion in underlying cash terms 

in FY2012-13.

Australian Federal Government net debt is 

expected to peak at 9.6% of GDP in 2011-12 and 

fall to zero by 2020-21.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Introduce a price on carbon through an 

emissions trading scheme.

Reduce carbon pollution by 5% from 2000 

levels by 2020 irrespective of what other 

countries do, and by up to 15% or 25% 

depending on the scale of global action.

Drive investment and provide 

new job opportunities in clean 

energy sources and support 

long-term competitiveness as 

the world moves to a carbon 

constrained economy.

In December 2011, legislation was passed to 

create Australia’s Clean Energy laws, delivering a 

carbon price mechanism.

Australia’s Clean Energy Laws will commence 

from 1 July 2012, beginning with a fixed price of 

A$23 per tonne and increasing by 2.5% a year in 

real terms.

The transition to a fully flexible cap-and-trade 

emissions trading scheme will begin from 1 July 

2015.

Meeting targets will require cutting expected 

pollution by at least 23% in 2020.

Introduce new resource tax arrangements 

from 1 July 2012.

Provide a more appropriate 

return to the Australian 

community from the 

exploitation of its nonrenewable resources.

Legislation for the new resource tax 

arrangements was passed in both Houses of 

Parliament on 19 March 2012.

The tax on mining profit at a rate of 22.5% will 

start from 1 July 2012.

Superannuation reforms:

- Progressively increase the superannuation 

guarantee rate from 9 per cent to 12 per 

cent from 1 July 2013 to 1 July 2019;

- Provide a Low Income Superannuation 

Contribution worth up to $500 for people 

with income up to $37,000 from 1 July 2012;

- Abolish the maximum age limit (70 years) 

for the superannuation guarantee from 1 

July 2013; and

- Provide a higher concessional contributions 

cap for individuals aged 50 and over with 

superannuation balances below $500,000.

Help Australians achieve a 

better standard of living in 

their retirement

Improve the fairness of the 

concessions provided for 

contributing to 

superannuation.

Legislation was enacted on 29 March 2012 for the 

increase in the superannuation guarantee rate, 

introduction of the Low Income Superannuation 

Contribution, and abolition of the maximum age 

limit for the superannuation guarantee.

The 2012-13 Budget deferred the start date of 

the higher concessional contributions cap for 

individuals aged 50 and over with superannuation 

balances below $500,000, from 1 July 2012 to 1 

July 2014. This will bring significant synergies and 

efficiencies, as it will allow implementation to 

occur in conjunction with changes to 

superannuation fund reporting and systems that 

will be occurring under the SuperStream reforms.

Superannuation reforms:

- Set up a framework for payslip reporting of 

superannuation benefits;

- Allow for the return of certain excess 

concessional contributions made from 1 July 

2012;

- Enable the ATO to disclose superannuation 

information to regulated superannuation 

Make superannuation simpler 

and fairer.

Increase the protection of 

workers superannuation 

entitlements.

Facilitate the consolidation of 

superannuation interests.

A new Bill was introduced into Parliament in early 

March 2012 to legislate the payslip reporting 

framework, return of certain excess concessional 

contributions, and disclosure of superannuation 

information by the ATO to regulated 

superannuation funds. On payslip reporting, the 

Government is considering whether to move 

straight to reporting actual contributions from 1 
Table: Policy Commitments by G20 Members AUSTRALIA

5

funds to assist members to consolidate lost 

and multiple accounts; and

- Reduce the tax concession which very high 

income earners (those with income above 

$300,000) receive on their contributions into 

superannuation from 1 July 2012, so it is 

more in line with the concession received by 

average income earners.

Improve the fairness of the 

concessions provided for 

contributing to 

superannuation.

July 2013, if feasible in response to a 

recommendation from a Parliamentary 

Committee that considered the bill.

The reform to reduce the tax concession which 

very high income earners receive on their 

contributions into superannuation was 

announced in the 2012-13 Budget. Legislation is 

expected to be introduced into Parliament in the 

Spring sittings.

Telecommunications reform 

- separation of wholesale and retail activities 

of the national telecommunications carrier

Achieve greater retail 

competition for consumers in 

the telecommunications 

services market and allow 

further progression of the 

rollout of the National 

Broadband Network (NBN).

The Australian Competition and Consumer 

Commission (ACCC) accepted the Structural 

Separation Undertaking (SSU) in February 2012.

The SSU came into force on 6 March 2012.

Infrastructure reform to improve transport 

quality.

These measures invest in highquality infrastructure projects 

that will expand capacity and 

boost productivity

These reforms were announced in the 2012-13 

Budget, building on the Nation Building programs, 

rolling out A$36 billion over six years to 2013-14. 

Completion of significant upgrade of a major 

national highway. The duplication of the Pacific 

highway is expected to be completed by 2016.

Reduced congestion on freight rail networks. This 

project will commence in 2015-16 

Development of an intermodal terminal to ease 

congestion at one of Australia’s major ports. This 

project will commence in 2012 and expected to 

be completed by 2017.

Tax reforms:

- Introduce a one year loss carry-back period 

in 2012-13 and a two year loss carry-back 

period from 2013-14, with a A$1 million cap 

on losses carried-back;

- Phase out the Dependent Spouse Tax 

Offset and consolidate the remaining 

dependency tax offsets;

- Better target the tax concession for livingaway-from-home allowances and benefits;

- Better target the tax concession for ‘golden 

handshakes’; and

- Phase out the Mature Age Workers Tax

Offset.

Support companies to invest to 

be competitive.

Encourage greater workforce 

participation by removing 

disincentives to participation 

for dependent spouses and 

other dependents.

Improve the integrity and 

fairness of the tax system by 

ensuring tax concessions are 

well targeted.

The reform to phase out the Dependent Spouse 

Tax Offset was announced in the 2011- 12 

Budget. Legislation has been introduced into the 

Parliament.

The other tax reforms were announced in the 

2012-13 Budget. Legislation has not yet been 

introduced into the Parliament.

Hold a Tax Forum on 4-5 October 2011 at 

Parliament House in Canberra, which brings 

together around 180 representatives of the 

community, business, unions and 

government, as well as academics and other 

tax exports.

Continue the national 

conversation about tax reform 

that the Government started 

with the release of the 

Australia’s Future Tax System 

review in May 2010, and 

identify the priorities and 

directions for the next steps of 

tax reform.

The Government has announced the following 

bodies and processes to further consider the 

priorities and directions for the next steps of tax 

reform identified at the Tax Forum:

- Business Tax Working Group

- Superannuation Roundtable

- Not-for-profit Sector Tax Concession Working 

Group

- State tax reform
Table: Policy Commitments by G20 Members AUSTRALIA

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Modernising the personal tax system from 1 

July 2012

Make the personal tax system 

more transparent and simpler 

for users to understand.

The legislative amendments received Royal 

Assent on 4 December 2011.

The tax free threshold will more than triple in 

2012-13 to A$18,200 and to A$19,400 in 2015-

16; the low income tax offset will be reduced.

Social policy reform

- Reform of the Aged Care sector

- Introduction of the first stage of a National 

Disability Insurance Scheme (NDIS).

Relieve growing pressure on 

the aged care system arising 

from the ageing of Australia’s 

population.

Ensure a more sustainable and 

fairer system, with more 

supply, higher quality of care, 

enhanced access, and is more 

responsive to the needs of 

older Australians.

To provide care and support 

for people with a significant 

and permanent disability in up 

to four launch locations.

These reforms were announced in the 2012-13 

Budget.

Funding for the Aged Care Workforce Compact 

has been allocated in the FY2012-13 Budget and 

the Compacts are scheduled to begin in July 2013.

Additional funding levels for home care packages 

to be introduced from 1 July 2013. The number of 

packages for every 1,000 people aged 70 years or 

over will increase from 113 to 120 by 2016 and to 

125 by 2021.

The first stage of the NDIS will roll-out to 10,000 

recipients in FY2013-14, rising to 20,000 

recipients in FY2014-15.

Labour market reform

- Assisting mature age workers to maintain 

their attachment to the workforce.

- Helping income support recipients increase 

their participation by increasing access to 

child care.

These reforms will reduce 

labour market barriers to entry 

and encourage greater 

workforce participation, 

boosting capacity and 

enhancing skills.

These reforms were announced in the 2012-13 

Budget and includes an additional A$101 million 

investment in workforce skills and training.

Introduction of a new Job Seeker Assistance 

Program from 2012-13 onwards to provide job 

seekers aged 55 and over with intensive job 

preparation assistance and training: 

- 10 000 jobs bonuses of $1000 each to 

employers who employ an eligible mature age 

jobseeker 

- 6,700 mature age job seekers will receive a 

‘silver service’ for intensive job preparations

From 2012-2016, provide funding of A$225.1 

million for the Jobs, Education and Training Child 

Care Fee Assistance Program.

Workforce training and participation reform. Increase participation in the 

workforce and build a stronger 

economy in the face of an 

ageing population.

Implementation of the A$3 billion package to 

reform the training system announced in the 

2011-12 Budget is well advanced. 

In April 2012, the Council of Australian Federal 

and State Governments agreed the detail of the 

vocational education and training reform agenda. 

Up to 130,000 new training places will be created 

over four years from 2011-12. Incentives for 

employers that provide new opportunities for 

around 35,000 very long-term unemployed over 

four years from 2011- 12, and better support for 

50,000 single parents from 1 January 2013.
Table: Policy Commitments by G20 Members BRAZIL

7

BRAZIL

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress 

Public sector primary surplus 

target of R$ 139.8 billion 

(compatible with 3.1% of GDP) 

for 2012, and 3.1% of GDP for 

the period 2013-15, 

maintaining a downward trend 

for the net public debt/2012-

2015

Continue to pursue the fiscal target in line with 

fiscal responsibility principles. 

Gradual reduction of the net public debt-to-GDP 

ratio, through coordination between fiscal and 

monetary policy.

Improve the balance between current expenditure 

and investment by making the latter increasing 

more than GDP.

Maintenance and expansion of the social safety 

net, focusing on reducing poverty and social 

inequality.

Primary surplus for 2011 was above the 

target (3.11% of GDP). In 2012, the ratio also 

exceeds target (3.11% until April).

Fiscal commitment for the period 2012-2015 

has been maintained.

Net public debt fell from 39.15% of GDP in 

2010 to 36.41% in 2011 and had a further 

reduction to 35.74% in April/2012.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress 

Central Bank has set the path 

to implement Basel III/2013-

2019

Brazil has been using 

macroprudential tools and 

may resort to additional 

measures if necessary.

To counter risks to financial and macroeconomic 

stability associated with strong and volatile capital 

inflows and rapid credit expansion.

In February/2012, Central Bank of Brazil 

submitted the Public Hearing No 40, with 

proposals for resolutions regulating the 

implementation of the new 

recommendations of the Basel Committee 

on Banking Supervision. The new rules 

improve the capital structure of financial 

institutions and introduce additional capital 

requirements, in line with the commitments 

made in the G-20. Interested parties have 90 

days to present their comments.

Brazil has been dealing with capital flows in 

a manner consistent with the Coherent 

Conclusions on Capital Flow Management.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Infrastructure investment 

growth by the second edition 

of the Growth Acceleration 

Program – PAC2 /2012-2014

To prepare Brazil for the 

Football Confederations’ Cup 

in 2013, FIFA World Cup in 

2014 and Olympic games in 

2016/2012-2016

Stimulating social inclusion, 

research and technology 

innovation, education, housing 

sector and infrastructure.

Increase investment in six main infrastructure 

areas: (i) Housing; (ii) Urban development; (iii) 

Citizen Community; (iv) Water and Electricity for 

All; (v) Transportation; and (vi) Energy. 

Investments of US$ 545.7 billion for 2011-2014 

and US$ 360.8 billion afterwards.

Improve infrastructure for these events and the 

legacy for the host cities. Investments of R$ 64 

billion (US$ 36.5 billion) are expected.

Maintenance and expansion of welfare programs 

related to income cash transfers such as “Bolsa 

Família”, which expects to include over 800,000 

households until 2013.

Enhancement of investment climate, industrial 

21% of multiyear budget implemented in 

2011.

US$ 26.3 billion are being invested.

In 2011, 13.3 million households received 

income transfers by “Bolsa Familia” 

program, totaling R$ 17.4 billion.

Government provided 1,233 scholarships 

through Science Without Borders in 2011.
Table: Policy Commitments by G20 Members BRAZIL

8

Plano Brasil Maior (Bigger 

Brazil Plan) and incentives to 

Innovation / 2012-2014

Eradicating extreme poverty 

and focusing on improving 

opportunities for vulnerable 

populations: “Brasil sem 

Miséria” (BSM) (Brazil Without 

Misery Plan) / 2012-2014

New rules for debenture. 

Special Purpose Vehicles will 

pay a fixed income tax rate of 

15%, (normally is 34%) / 2012-

2016

Reform of Social Security in 

the Public Sector – Creation of 

Funpresp

Reform of the state 

governments’ value-added 

tax (ICMS) on inter-state 

transactions/2012-2018

competitiveness and research and technological 

innovation. Strengthening education programs 

such as “Ciência sem Fronteiras” (Science Without 

Borders): Goal is to grant 101,000 scholarships 

(75,000 by government and 26,000 by the private 

sector).

To enhance competitiveness, diversify exports and 

facilitate internationalization of Brazilian 

companies.

The BSM plan comprises three main pillars: i) 

increasing the household per capita income; ii) 

extending access to public services, citizenship 

actions and social welfare; and iii) extending 

employment and income opportunities. 

- Bolsa Verde” (“Green Grant”) – each household 

receives R$ 300 (US$ 171) quarterly payment for 

environmental conservation services. Target is to 

reach 73,000 households by 2014. 

Support for small farmers – each household 

receives R$ 2,400 (USD 1,371) to acquire supplies 

and equipment. 253,000 households will be 

enrolled until 2014.

To stimulate private funding for infrastructure 

projects.

Reform of social security of civil servants will add a 

significant amount to private pension funds, rising 

savings for long-term investments. Public sector 

pension deficit will be zero in the long run. 

Aiming at resolving a tax incentive battle between 

state governments which reduced tax collection. 

The rate of value-added tax applied on inter-state 

transactions was redefined, assigning the share of 

tax collection that belongs to the seller and 

recipient states.

Tax cuts in the wages bill in the tradable 

sector. Speeding up the process of taxes 

reimbursement paid on exported goods and 

services.

Implementation of “Bolsa Verde” (“Green 

Grant”) as a part of “Brasil Sem Miséria” 

(Brazil Without Misery) in November 2011.

“Brasil Carinhoso” (Caring Brazil), an 

initiative that will benefit over 2 million 

households and 2.7 million children, was 

launched. Coupled with health and 

education investments aimed at early 

childhood, it will grant a minimum income 

of R$ 70 (US$ 35) per person to poor 

households that have at least one child up 

to six years and 11 months of age.

Program established in November 2011. 

There are already projects under the new 

legal framework.

Signed into law in May/2012. Awaiting the 

issuance of the government regulations.

There has already been a reduction on the 

rate from 12% to 7% and 4% regarding 

imported goods. The Senate has approved a 

regulation to go into effect in 2013.

External development policies

Commitment/Timeframe Objectives Update on Progress

Technical Cooperation / 2012-

2014

Contributions to International 

Organizations and Funds

Debt relief

Approximately US$ 84 million to be implemented 

in the period 2011-2014.

Cooperate with multilateral efforts in favor of 

global development.

Support efforts of developing countries in the area 

of debt management.

Between 2006 and 2011, US$ 81 million 

were disbursed towards approximately 200 

projects.

Brazil contributes annually with over US$ 

200 million to development-oriented 

organizations. 

Ongoing debt restructuring process has 

been accelerated. 
Table: Policy Commitments by G20 Members CANADA

9

CANADA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

1. The Government will implement the 

comprehensive review of departmental 

spending, which will support a return to 

balanced budgets over the medium term. The

Plan will engage with about 70 federal 

organizations to identify annual savings by 

2014-2015 equal to roughly 5% of total 

federal direct program spending.

Timeframe: Medium Term

Return to balanced 

budgets over the 

medium term.

As of FY2011-12, the deficit has been cut in half in just 

two years. The 2011 departmental spending review 

has resulted in the identification of annual savings 

amounting to $5.2 billion by 2014-15, or 6.9% of the 

review base, exceeding the 5% target. As a result of 

this and other spending restraint actions implemented 

since 2010, the Government is on track to eliminate 

the deficit over the medium term.

Measure of Progress: 

Return to balanced budgets over the medium term.

2. Adjusting the Public Service Pension Plan so 

that public service employee contributions 

equal, over time, those of the employer. 

Comparable changes to the contribution rates 

will be made to the pension plans for the 

Canadian Forces, the Royal Canadian 

Mounted Police and Parliamentarians. 

For employees who join the federal Public 

Service starting in 2013, the normal age of 

retirement will be raised from 60 to 65.

Ensure pension plans for 

Public Servants and 

Parliamentarians are 

sustainable, financially 

responsible, and broadly 

consistent with pension 

products offered by 

other jurisdictions as 

well as fair and relative 

to those offered in the 

private sector.

Adjustments to employee pension contributions will 

commence following consultations with key 

stakeholders. Retirement age changes will take effect 

for new employees who enter the Public Service in 

2013. Adjustments to the pension plan of 

Parliamentarians will take effect in the next 

Parliament.

Measure of Progress:

Public service employees’ contributions will increase, 

over time, to eventually match those of the employer.

3. Set the future growth path of transfers to 

provinces and territories to provide 

sustainable and predictable funding in 

support of the provision of health care, 

education and other programs and services 

for all Canadians.

To ensure the 

sustainability of our 

social programs and 

fiscal position over the 

longer term.

The Government will introduce legislation to continue 

the current 6-per-cent annual escalator for the Canada 

Health Transfer (CHT) will continue for five more years.

Measure of Progress:

Starting in 2017–18, the CHT will grow in line with a 

three-year moving average of nominal GDP growth, 

with funding guaranteed to increase by at least 3 per 

cent per year. Legislation will also continue the 3-percent escalator for the Canada Social Transfer (CST) for 

2014–15 and subsequent years. 

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

1. Canada’s financial system continues to be 

recognized as one of the soundest in the 

world. As part of these efforts, the 

Government has launched its 5-year review of 

federal financial institutions legislation to 

ensure that it is up-to-date and responsive to 

global and domestic developments. 

Timeframe: The current legislative review 

was launched in September 2010; legislative 

amendments will be introduced in fall 2011 to 

ensure that the statutes are renewed before 

the sunset date of April 20, 2012.

The regular review of all 

financial sector 

legislation ensures that 

the laws and regulations 

by which our financial 

systems are governed 

are current, contribute 

to stability and growth of 

the financial sector, and 

remain responsive to 

developments in the 

global financial system. 

The most recent legislative review was completed on 

March 29, 2012 with the Royal Assent of the Financial 

System Review Act and includes measures to: update 

financial institutions legislation and competition; 

enhance the supervisory powers of the Financial 

Consumer Agency of Canada; and improve efficiency 

by reducing the administrative burden on financial 

institutions and adding regulatory flexibility.

2. The Government is working on a 

cooperative basis with willing provinces and 

A common securities 

regulator would create 

In its effort to establish a Canadian securities regulator, 

in May 2010 the Government referred the proposed 
Table: Policy Commitments by G20 Members CANADA

10

territories towards a common 

securities regulator.

in Canada a more 

efficient and streamlined 

securities regulatory 

system that further 

reinforces financial 

stability, strengthens 

enforcement, better

protects investors and is 

more accountable.

Canadian Securities Act to the Supreme Court of 

Canada for an opinion as to whether Parliament 

has the constitutional authority to enact the proposed 

legislation. On December 22, 2011, the Supreme Court 

determined that the proposed Act as drafted was not 

constitutionally valid under the general branch of the 

federal power to regulate trade and commerce. The 

Court also indicated that “[t]he common ground that 

emerges is that each level of government has 

jurisdiction over some aspects of the regulation of 

securities and each can work in collaboration with the 

other to carry out its responsibilities”. It recognised 

that federal jurisdiction could include the management 

of systemic risk and ensuring fair and efficient national 

capital markets. 

The Government is consulting with provinces and 

territories, a number of which have reaffirmed their 

interest in working towards a common securities 

regulator.

3. A priority for the Government is reinforcing 

Canada’s financial stability framework 

through the implementation of over-thecounter (OTC) derivatives markets reform, a 

key G-20 commitment.

Reduce systemic risk and 

improve market 

efficiency, transparency 

and integrity. 

The Government has established an inter-agency OTC 

Derivatives Working Group to coordinate efforts to 

meet the G-20 commitment on OTC derivatives 

markets reform. The Government announced in 

Budget 2012 that it will introduce legislative 

amendments to support central clearing of 

standardized OTC derivative transactions, and to 

reinforce Canada’s financial stability framework.

Measure of Progress:

Passage of legislative amendments

4. The Government strives to continuously 

strengthen the housing finance system.

Residential mortgage default insurance and 

securitization play an important role in 

Canada’s housing finance system and are 

dominated by the government-owned Canada 

Mortgage Housing and Corporation (CMHC).

Budget 2012 announced the Government will 

propose legislative amendments to 

strengthen the governance and oversight 

framework for CMHC. 

To promote the stability 

of the financial system.

Measure of Progress:

Passage of legislative amendments

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

1. Canada is implementing the next phase of 

the Economic Action Plan with strategic 

investments focused on enhancing the drivers 

of growth: supporting job creation; 

families/communities; supporting research, 

education and skills development and 

eliminating tariffs on machinery and 

manufacturing inputs; and, preserving 

Canada’s fiscal advantage. Canada is also 

working with the US to establish a new longCreate the right 

environment to attract 

investment and promote 

productivity growth and 

economic 

competitiveness as well 

as supporting free and 

open markets. 

Research, education & skills: Budget 2012 provides 

more than $800 million over five years in new funding 

to continue Canada’s advanced research leadership. 

This is in addition to the nearly $8 billion in new 

funding provided since 2006.

Tariff Relief: Canada is eliminating all tariffs on 

manufacturing inputs and machinery and equipment, 

becoming the first tariff-free zone for industrial 

manufacturers among the G20. Since the Cannes 
Table: Policy Commitments by G20 Members CANADA

11

term partnership that will accelerate the 

legitimate flow of people/goods between 

both countries.

Timeframe: medium term

Summit, Canada has eliminated an additional 72 tariffs 

on goods used by manufacturers, with annual duty 

savings estimated at $62 million. In total since 2009, 

the Government has eliminated tariffs on over 1,800 

items, providing annual duty savings of close to $450 

million to Canadian manufacturers.

Long-Term Partnership with US:

 On December 7, 2011, the Canada-U.S. Shared Vision 

for Perimeter Security and Economic Competitiveness 

Action Plan was announced by Prime Minister Harper 

and President Obama.

 Good progress is being made on implementing the 

Plan’s 32 initiatives and a handful of targets have 

already been reached. 

Significant work is being done domestically to ensure 

that all mechanisms are in place to meet Canada’s

commitments on time.

2. Budget 2012 commits to increase the 

eligibility age for Old Age Security (OAS) and 

Guaranteed Income Security (GIS) benefits 

from 65 to 67.

To ensure the 

sustainability of our 

social programs and 

fiscal position over the 

longer terms.

Starting on July 1, 2013, there will be flexibility to defer 

the OAS pension for a maximum of five years and to 

receive an actuarially increased pension. 

Measures of Progress:

Measures to take effect in 2023 with full 

implementation by January 2029. 

3. Budget 2012 announced a number of 

structural changes such as:

i) Modernizing the regulatory system for 

major economic projects; 

ii) Implementing a new approach to 

support business innovation; 

iii) Reforming the immigration system 

such that it meets Canada’s labour 

market needs;

iv) Improving incentives to work while 

receiving Employment Insurance 

benefits, aligning benefit calculation 

with local labour market conditions, 

enhancing the content and timeliness 

of labour market information provided 

to EI claimants, and clarifying what is 

required of claimants who are 

receiving regular benefits and are 

looking for work. and,

v) Expanding opportunities for Aboriginal 

peoples to fully participate in the 

economy. 

To raise Canada’s longterm economic potential Legislation has been introduced to give effect to most 

of these Employment Insurance measures.

Measures of Progress:

Changes will begin to take effect in 2012. 

4. Budget 2012 announced that the 

Government will introduce amendments to 

the Telecommunications Act to lift foreign 

investment restrictions for telecom 

companies that hold less than a 10 per cent 

share of the total Canadian telecom market. 

To promote productivity 

and innovation, as well 

as creating the right 

environment to attract 

investment.

Measures of Progress:

Passage of amendments with changes to take effect in 

2012-13.
Table: Policy Commitments by G20 Members CHINA

12

CHINA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Continue to implement a 

proactive fiscal policy.

Strengthen efforts to manage 

local government debts and 

prevent risks.(2011, 2012)

Reduce the fiscal deficit to around -1.5% of 

GDP. (2012)

Further improve the structural tax reduction 

policies. Strictly control new debts of local 

governments. (2011, 2012)

In 2011, the national fiscal deficit accounted 

for -1.8 % of GDP.

Implementing the structural tax reduction 

policies: 1) raising the individual income tax 

threshold on salaries from 2000 yuan to 3500 

yuan per month and adjusted the tax rate 

structure. Based on static calculation, the 

revenue of individual income tax was reduced 

by 53 bn yuan in 2011; 2) continuing to 

implement preferential income tax policy for 

some small businesses with low profits, and

initiating a series of relief and exemption 

policies for tax and fee, such as raising 

thresholds of VAT and business tax, with the 

aim to promote the development of small 

businesses with low profits; 3) putting into 

effect lower provisional import tariffs on over 

700 resource products, basic raw materials 

and key components in 2012, a coverage 

which is bigger than that of 2011.

Significantly enhance the ability 

of fiscal macro-regulation, 

further optimize the structure of 

fiscal revenue and expenditure, 

make further progress in fiscal 

and taxation reform, improve 

the scientific and meticulous 

management of public finance, 

and build a fiscal and taxation 

system conducive to the 

transformation of economic 

development pattern. (2011-

2015)

Further improve the fiscal macro-regulation 

system, effectively control fiscal risks, 

strengthen fiscal sustainability; Maintain the 

stable growth of fiscal revenue and further 

rationalize its structure; optimize the 

expenditure structure with priority in 

agriculture, rural development and farmers, 

education, science and technology, culture, 

health care, social security and employment, 

low-income housing, environmental 

protection, energy conservation and emission 

reduction; Further improve the fiscal and 

taxation system, deepen the reform of budget 

management system and enhance the 

management system of public funds. (2011-

2015)

Increase policy support to strengthen 

agriculture and benefit farmers; Implement 

more proactive employment policies, and raise 

the income of urban and rural residents, 

particularly those in low and middle income 

brackets; Ensure budgetary expenditure on 

education nationwide account for 4% of GDP; 

Achieve full coverage of the new pension 

insurance system for rural and urban 

residents; Consolidate and expand the 

coverage of basic medical insurance and 

enhance the capability to provide and manage 

basic medical services; continue to develop 

low-income housing, and start construction of 

Continuing to expand household 

consumption: 1) implementing more proactive employment policy; 2) increasing 

incomes of the rural and urban residents; 3) 

continuing to implement policies on providing 

subsidies for rural residents to purchase home 

appliances and subsidies for trading in old 

home appliances for new ones; 4) supporting 

the improvement of the infrastructure for 

goods distribution.

Supporting to improve people’s living 

standards. The fiscal expenditures in areas 

that have a direct bearing on people’s 

wellbeing, namely education, medical and 

health care, social security, low income 

housing and culture increased by 30.3% in 

2011 over the previous year. 

Advancing the fiscal and taxation reform. 1) 

devising a pilot plan for replacing business tax 

with VAT to promote development of the 

service sector; 2) reforming the individual 

income tax system; 3)carrying out the pilot 

reform of property tax on residential houses 

and adjusting the business tax policy for 

trading them; 4)implementing a nationwide 

reform of resource tax on crude oil and 

natural gas on the ad valorem basis, and 

integrating the resource tax systems on crude 

oil and natural gas for domestic and foreign-
Table: Policy Commitments by G20 Members CHINA

13

over 7 million units of this kind; Ensure that 

the growth rate of government spending on 

cultural development exceeds that of the 

regular fiscal revenue; Increase input in 

science and technology, optimize expenditure 

structure in this area; Actively promote energy 

conservation and emission reduction, and 

accelerate development of new, renewable 

and clean energy; Vigorously support the 

development of strategic emerging industries 

and high-tech industries, promote faster 

development of the modern service industry 

and support the development of small and 

medium-sized enterprises; Put into effect the 

fiscal and tax policies that promote balanced 

regional development; Improve the revenuesharing system and the system of transfer 

payment, increase the scale and proportion of 

general transfer payments; Improve the 

consumption tax system, comprehensively 

deepen the reform of resource tax, and 

steadily advance the pilot reform of property 

tax on residential houses; Work steadily to 

make the budgets and final accounts of local 

governments more transparent and explore 

the way to incorporate debt-generated 

revenue and debt repayments into budget 

management based on their type. (2012)

funded enterprises; 5) continuing to improve 

the structure of transfer payment, and 

increasing general transfer payment; 6) 

eliminating all off-budget funds and 

incorporating all government revenues into 

budget management; 7) improving the budget 

management system, actively advancing 

performance-based budget management; 8) 

promoting transparency of the central 

government budgets and final accounts, and 

opening the item-by-item final accounts of 

public finance to the general public.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

Implement a prudent monetary 

policy and keep AFRE (Aggregate 

Financing to the Real Economy) 

at an appropriate level. (2011, 

2012)

Broad money supply 

(M2) increases by 

16% in 2011 and 14% 

in 2012.

Monetary policy remained prudent in 2011. The PBC raised reserve 

requirement ratio 6 times and policy interest rates 3 times in the first 

three quarters in 2011, and cut the reserve requirement ratio on Dec 5, 

2011 and Feb 24, 2012, each by 0.5 percentage points. The PBC also 

used the mechanism for adjusting the differentiated reserve 

requirement on a continuous and case-by-case basis, drawing on its 

counter-cyclical adjustment role to ensure a stable credit growth.

Goals for monetary policy are met. CPI dropped for 5 months in a row 

since Aug 2011, and rose by 5.4 percent for 2011 as a whole, and 3.2 

percent in Feb 2012. Money and credit growth slowed down steadily, 

with yoy M2 growth subduing to 13.6 percent in end-Dec 2011, and 

further moderating by 0.6 percentage points to 13 percent in end-Feb, 

2012. New RMB lending recorded 1.45 trn yuan in the first two months 

in 2012, down by 115.2 bn yuan yoy. Aggregate financing to the real 

economy remained at a reasonable level, totaling 12.83 trn yuan in 

2011, down by 1.11 trn from 2010.

Improve conduct of Monetary 

Policy. (Medium-term to longterm)

Optimize monetary 

policy target system, 

improve the 

transmission 

mechanism and 

environment of 

monetary policy, 

The PBC introduced a new indicator, aggregate financing to the real 

economy, and adopted the mechanism for adjusting the differentiated 

reserve requirement on a continuous and case-by-case basis. 

Continuous efforts are made to lay a stronger foundation for marketbased interest rate reform. This includes efforts to foster money 

market benchmark interest rates, encourage stronger pricing ability at 
Table: Policy Commitments by G20 Members CHINA

14

keep the overall level 

of prices basically 

stable. Promote the 

market-based reform 

of interest rates in an 

orderly manner.

financial institutions, and improve the interest rate management 

system at the central bank. The PBC also made assessments on future 

paths to further reforms, and reviewed ways to encourage innovation 

and development of market-priced alternative financial products.

Further promote the reform of 

RMB exchange rate regime. 

(Medium-term to long-term)

Improve the RMB 

exchange rate 

regime, and increase 

the RMB exchange 

rate flexibility in both 

directions while 

keeping it basically 

stable at a rational 

and equilibrium 

level.

RMB exchange rate moves in both directions with notably stronger 

flexibility, supported by a stronger fundamental role of market supply 

and demand. As of Mar 30, 2012, the central parity of RMB/USD 

exchange rate appreciated by 5.22 percent since end-2010, and 31.49 

percent since July 2005, when the recent round of reform was 

launched. As of Feb 2012, RMB REER appreciated by 30. 28 percent 

since July 2005, ranking 4th in the 58 currencies monitored by the BIS in 

terms of appreciation. 

Effective from April 16, 2012, the floating band of RMB’s exchange rate 

against the U.S. dollar in the interbank spot foreign exchange market is 

widened from 0.5 percent to 1 percent around central parity.

Promote foreign exchange 

management regime reform. 

(Medium-term to long-term)

Improve the 

management of 

reserve assets.

Foreign reserve grows at a slower pace, and even declines in late 

2011. Following a slowdown in the first 8 months in 2011, the 

outstanding value of foreign reserve decreased by 60.8 bn U.S. dollars 

in Sep, the first monthly decline in 16 months, and dropped further by 

52.9 bn in Nov and 39.8 bn in Dec.

Expand the use of RMB in crossborder trade and investment. 

(Medium-term to long-term)

Support the use of 

RMB by more 

enterprises in crossborder trade and 

investment, develop 

plans for RMB 

businesses for retail 

customers, and 

facilitate crossborder RMB flows 

through retail 

businesses.

Gradually make the 

RMB convertible 

under capital 

account.

Cross-border use of RMB: in Dec 2011, RQFII (RMB Qualified Foreign 

Institutional Investor) scheme was launched, allowing HK-based 

subsidiaries of mainland fund management companies and securities 

companies to use RMB raised in HK to invest in securities in the 

mainland. In Mar 2012, all qualified enterprises were allowed to settle 

exports in RMB.

Capital account convertibility: With regard to RMB FDI, the process of 

capital verification inquiry and reinvestment is streamlined, and the 

approval process for purchase and payment in foreign exchange is 

removed. Both domestic and foreign funded enterprises are allowed to 

use foreign currency receipts as collateral to obtain RMB loans.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Further promote financial sector 

reform. (2011-2015)

Deepen the reform 

of financial 

institutions, optimize 

modern financial 

corporate system, 

strengthen internal 

governance and risk 

management. 

Accelerate the 

development of 

multi-level financial 

market system.

Promote the 

Financial sector reform is advanced in an orderly manner. The PBC is 

reviewing plans for further reforming large commercial banks and 

policy financial institutions, developing assessment methodology, 

regulatory requirements as well as recovery and resolution plans for DSIFIs, formulating regulatory rules for financial holding companies, 

improving systems for the pre-warning, assessment and resolution of 

systemic financial risks, and strengthening coordination on financial 

regulation.

Pilot projects in Wenzhou city on financial reforms: encourage and 

support private sector’s participation in starting or holding shares of 

micro-financing institutions; design and carry out the pilot program of 

exploring legitimate and efficient channels for outward direct 

investment by individuals; encourage innovation and development of 
Table: Policy Commitments by G20 Members CHINA

15

establishment of a 

counter-cyclical 

macro-prudential 

policy framework. 

Strengthen financial 

regulation and 

supervision, and 

improve financial 

supervision 

coordination.

financial products and services for small- and micro-sized enterprises, 

and for the agriculture sector, the rural area and the farmers.

Banking: implementation of Basel III is underway. The China Banking 

Regulatory Commission (CBRC) has set requirements on leverage ratio 

in commercial banks, and strengthened liquidity risk management by 

implementing Basel III liquidity standards. The framework for 

identification and supervision of G-SIBs and D-SIBs is improved, and DSIBs are required to develop recovery and resolution plans. The CBRC is 

intensifying efforts to monitor and identify systemic risk, and improve 

the counter-cyclical supervision mechanism.

Securities: additional requirements on counter-cyclical adjustment are 

incorporated into the risk control indicators. The Main board and the 

SME board continue to expand, with market cap totalling 17.91 trn and 

2.74 trn yuan respectively at end-2011, while market cap for Growth 

Enterprise Board reached 743.4 bn yuan. Work is underway to build an

OTC market.

Insurance: The China Insurance Regulatory Commission (CIRC) has 

taken a series of measures to improve the insurance market, including 

enhancing risk prevention through stronger solvency supervision, 

encouraging institutional improvement by setting higher standards for 

corporate governance, insurance groups and transparency, and taking 

tough actions against market irregularities and violations. 

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Promote the strategic 

adjustment of economic 

structure. (2011-2015)

·The household 

consumption rate 

increases.

·Promote a basically 

balanced BOP 

account.

·Accelerate the 

development of the 

service sector and 

raise its value-added 

contribution to GDP 

by 4 percentage 

points.

·Increase the 

urbanization rate by 

4 percentage points.

·Increase spending 

on R&D to 2.2% of 

GDP.

Industrial restructuring and upgrading is accelerating. Restructuring 

and reviving plans for key industries are being implemented, and 

further policies are being developed to support strategic emerging 

industries. Modern services, including consultancy and e-commerce, 

and transportation are expanding rapidly.

Urbanization rate exceeds 50 percent as of end-2011, representing a 

historic change in China’s social structure.

BOP account becomes more balanced. Trade surplus falls to a six-year 

low, deceasing by 48 percent from 2008 to 2011, from 6.7 percent of 

GDP to 2.6 percent accordingly. Current account surplus as a percent of 

GDP drops from the record high of 10.1 percent in 2007 to 2.76 percent 

in 2011, an appropriate level.

Demand structure becomes more balanced among investment, 

consumption and export. In 2011, domestic demand contributed 106 

percent to growth. In particular, contribution of final consumption rose 

to 52 percent, compared with 42 percent in 2010.

This progress is facilitated by policy adjustments that remove barriers, 

including encouraging the use of foreign exchange by institutions and 

individuals, encouraging imports (imports growth outpaced exports 

since 2008), and accelerating the Going Global strategy (outward 

investment averaged 39.1 bn USD annually from 2006 to 2010, up 870 

percent from the average level in the 2001-2005 period).

In particular, measures have been taken to promote trade balance. In 

2011, China announced zero tariff treatment for imports under 97% 

items from least developed countries that have diplomatic relations 

with China, as a process within the South-south cooperation 

framework. China also started talks on FTA agreements, and sent many 

trade and investment promotion missions to a large number of 

countries.
Table: Policy Commitments by G20 Members CHINA

16

Comprehensively improve the 

people's wellbeing. (2011-2015)

·Create an extra 45 

million urban jobs 

and keep registered

urban

unemployment no 

higher than 5%.

·The per capita 

disposable income of 

urban residents and 

the per capita net 

income of rural 

residents will rise by 

an average annual

rate of over 7% in 

real terms.

·Increase the 

proportion of 

expenses for medical 

treatment paid out 

of the medical 

insurance fund to 

over 70% in 

accordance with 

relevant policies.

·Low-income housing 

will be made 

available to around 

20% of the country's 

urban households.

Urban registered unemployment rate stayed at a low level of 4.1 

percent at end-2011. In 2011, a total of 12.21 mn new jobs were 

created in urban areas, 530,000 more than the number in 2010.

Household income keeps increasing in 2011, with net per capita 

income of rural residents up by 11.4 percent in real terms, the highest 

rate since 1985, and per capita disposable income of urban residents up 

by 8.4 percent in real terms, representing a closing income gap 

between rural and urban residents for the past two years.

Social security system is improved, with a significant rise in the number 

of people covered by urban basic pension and unemployment insurance 

programs.

Universal coverage of medical insurance is achieved, with over 1.3 bn 

rural and urban residents are covered by basic medical insurance 

programs for urban employees and residents and the New Cooperative 

Rural Medical Insurance scheme. Government subsidy for medical 

insurance keeps increasing. Annual subsidy for each urban and rural 

residents covered by the programs was raised to 200 yuan in 2011 from 

120 yuan in 2010, and is set to further increase to 240 yuan in 2012. 

Benefit under the medical insurance programs increases steadily, with 

over 75 percent of hospitalization costs is now covered for urban 

employees, and 70 percent for urban and rural residents treated at 

designated hospitals at or below level two.

Spending on affordable housing project is increased. In 2011, spending 

on affordable housing project by the central government rose by 220 

percent yoy to 171.3 bn yuan, with 4.32 mn units completed and 

another 10.43 mn units being built.
Table: Policy Commitments by G20 Members EUROPEAN UNION / EURO AREA

17

EUROPEAN UNION / EURO AREA

Economic Governance

Commitment/Timeframe Objectives Update on Progress

Address the sovereign debt crisis in 

the euro area by a comprehensive set 

of measures (decisions by euro-area 

Leaders of 21 July and 26 October).

-Provide necessary financing to 

euro-area Member States in 

difficulty under strict 

conditionality and together with 

the IMF.

-For Greece, the objective is to 

ensure that the public debt ratio is 

brought on a downward path 

reaching at most 120.5% of GDP 

by 2020.

-Significant optimisation of the 

firewall resources.

-Programmes are ongoing – until 2013 for Ireland 

and 2014 for Portugal.

-For Greece, euro-area Finance Ministers approved 

financing of the second Greek economic 

adjustment programme until 2014. Under a 

baseline scenario, the debt-to-GDP ratio would 

decline to below 117% in 2020 and would keep 

declining to below 90 % in 2030.

-The European Stability Mechanism (ESM) will 

become the main instrument for financing 

programmes as of its entry into force (expected for 

July 2012, upon ratification of the ESM Treaty, and 

one year earlier than originally planned).

Further strengthen economic

governance and policy

coordination in the EU and the

Euro Area.

-Strengthen policy coordination in

the EU and the euro area.

-Strengthen budgetary discipline,

including strengthening the 

Stability and Growth Pact.

-Reinforce the sovereign firewalls.

-Prevent and correct

macroeconomic imbalances within

the EU.

-Legislation entered into force in December 2011 

and is currently being applied. It strengthens the 

preventive and corrective arm of the Stability and 

Growth Pact, and sets minimum standards for 

national fiscal frameworks. It also introduced a 

procedure to prevent/correct macro-economic 

imbalances. For euro area Member States, it 

significantly strengthens enforcement mechanisms, 

in particular through a gradual system of sanctions.

-On 23 November 2011, the Commission 

proposed two legislative acts to further 

strengthen budgetary and economic surveillance 

in the Euro Area. An agreement has already been 

reached on both texts within the Council. It is 

aimed to have these two legislative proposals in 

force in 2012. The Treaty on Stability, 

Coordination, and Governance in EMU was signed 

on 2 March 2012 by 25 EU Member States. It may 

enter still into force at end-2012, depending on 

progress made in ratification.

-The cumulative lending ceiling of the

EFSF and ESM has been increased to €700bn. Both 

will coexist on the markets until 30 June 2013, with 

the EFSF continuing to service its existing 

commitments under current programmes (EL, IE, 

PT). Payment of the ESM paid-in capital has been 

accelerated (with final tranche to be paid in 2014).

-Progress in reducing imbalances has been seen in 

many Member States. First in-depth reviews were 

issued on 30 May 2012. The findings are reflected 

in the country-specific recommendations put 

forward by the European Commission on 30 May 

2012. The recommendations will help Member 

States to prepare and adopt their national 

economic policies and budgets for 2012-2013.
Table: Policy Commitments by G20 Members EUROPEAN UNION / EURO AREA

18

Implementation of the recommendations will be 

monitored closely and on an ongoing basis by the 

European Commission. A formal assessment of 

each EU Member State's performance will take 

place in May/June 2013.

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Implement the common budgetary 

framework to ensure a continuous 

reduction of Member States' budget 

deficits.

-Pursue a differentiated fiscal 

consolidation, taking into account 

country-specific fiscal and macrofinancial risks.

-Putting emphasis on growthfriendly composition of 

consolidation: Pursue an 

expenditure-based consolidation 

while prioritizing public spending 

towards investments in human 

capital, research and innovation.

-Conditional on the current macroeconomic 

forecast, the current fiscal consolidation strategy 

would allow achieving a budget deficit of 3% of 

GDP for the euro area aggregate and 31⁄2% of GDP 

for the EU in 2012. The deficits would then decline 

to below 1% of GDP in the EU and to 3⁄4% of GDP in 

the euro area in 2015. This consolidation path 

would contribute to stabilising the increase in 

government debt-to-GDP ratio in 2013 and to 

putting it on a declining path afterwards. In case of 

economic shocks, the flexibility embedded in the 

Stability and Growth Pact allows modulating the 

consolidation.

-Ongoing.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

The primary objective of monetary 

policy in the euro area is on 

maintaining price stability in the 

medium term for the euro area as a 

whole.

The euro is a floating currency.

The Governing Council of the ECB 

has defined price stability as an 

annual increase in the Harmonised

Index of Consumer Prices (HICP) 

for the euro area of below, but 

close to, 2% over the medium 

term.

The ECB’s Governing Council has kept an 

accommodative monetary policy stance and has 

taken a number of non-standard monetary policy 

measures in response to financial market tensions. 

Two three-year long term refinancing operations 

(LTROs) were carried out in December 2011 and 

February 2012, totalling over EUR 1 trillion, to 

forestall a curtailment of credit supply to the euro 

area economy.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Comprehensive package to restore 

confidence in the banking sector.

-Facilitate access to longer term 

funding through a coordinated 

approach at EU level.

-Temporary increase in the capital 

position of 71 banks to 9% of Core 

Tier 1 capital including a buffer on 

sovereigns. Banks should first use 

private sources of capital. If 

necessary, national governments 

should provide support. In certain 

cases where this is not feasible, the

sovereign firewall (in the case of 

euro-area Member States) could 

be used.

-Repayment of LTRO only allowed one year after 

accessing it.

-Compliance with capital requirements of the 

European Banking Authority (EBA) capital exercise 

by end June 2012; preliminary aggregate report 

published in February by the EBA on the capital 

exercise was positive with an excess buffer of 26% 

and mostly capital-generating measures.

Enhancing financial sector stability 

through several legislative packages.

Improvements to existing 

legislation in the area of Markets in 

Financial Instruments Directive 

(MiFID), Credit Rating Agencies 

The proposals are now in the European Parliament 

and the Council (Member States) for negotiation 

and adoption. The implementation date for CRA is 

2013. For OTC derivatives, the implementation is 
Table: Policy Commitments by G20 Members EUROPEAN UNION / EURO AREA

19

(CRA) and OTC derivatives. to start from January 2013. For MiFID, the 

objective is to reach an agreement between the EU 

Council and the European Parliament by December 

2012.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Further integrating the Single Market. To support growth and 

employment. Ensure agreement 

on the 12 priority proposals set out 

in the Single Market Act (SMA); 

complete implementation of the 

Services Directive; and complete 

the Digital Single Market (DSM).

-Following agreement on the Single Market Act 

proposals, the EU aims to adopt key actions for 

each lever in the SMA by the end of 2012. A first 

wave of key actions is well-advanced. The 

European Commission will in 2012 propose a 

second set of actions to further reduce market 

fragmentation in the case of the Single Market of 

services and network industries.

-Completion of the DSM by 2015.

Foster further integration in the Single 

Market for financial services.

The European Commission 

proposed a directive (CRD IV) and a 

regulation (CRR) intended to 

enshrine a "single rule book" for 

financial institutions in the EU and 

maximum harmonization of 

prudential legislation in all 

Member States. The proposals will 

further foster integration in the 

single market for financial services.

Moreover new legislation is being 

developed in the area of bank crisis 

management and resolution.

CRR/CRD IV to be implemented gradually as of 

2013.

Mobilising labour markets The global EU targets set in the 

Europe 2020 Strategy are to: (i) 

raise to 75% the employment rate, 

and (ii) improve education levels.

EU2020 specific targets refer to the 2010- 2020 

timeframe. Ongoing.
Table: Policy Commitments by G20 Members FRANCE

20

FRANCE

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

France commits to reduce its deficit to 4.5% in 2012 

and to 3% in 2013, balance its budget by 2017.

Increase fiscal sustainability 

through mid-term fiscal 

consolidation

Corrective measures will be taken in the 

event of deviations, as identified by a 

report of the independent Court of 

Auditors available by the end of June. 

Adopt a tax reform in a supplementary budget law this 

summer and reduce the least efficient tax 

expenditures and social security exemptions.

Ensure short term public 

finances objective are met 

by increasing public 

revenues as needed while 

reducing inequalities and 

avoiding adverse effects on 

growth.

Complement the budget law for 2013 with a multiyear budget law this autumn.Secure mid term public 

finances objectives by 

defining governance rules 

over the five years of the 

parliamentary term.

Launch a global consultation with the social partners 

on the pension system this summer in a sustainable 

and balanced financial framework.

Ensure the sustainability and 

fairness of the pension 

system in the middle run.

The on-going reform to allow workers who 

started their professional life early and 

have reached the required contributory 

period to retire at the age of 60 will be 

integrally financed. Both legal age of 

entitlement (62) and age of entitlement to 

a full pension (67) remain unchanged for 

other workers.

The COR (Pension advisory Council) is 

reviewing the financial situation of the 

pension system till 2018 and beyond. 

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

Please refer to Euro area contribution

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Implement internationally agreed standards on banks 

including Basel II, Basel II-5, Basel III and the G-SIFIs 

framework according to the EU timeline

Ensure that all financial 

markets, products and 

participants are regulated or 

subject to oversight

EU Capital Requirements Directive IV 

(Basel III) to be adopted in the course of 

2012. Coming EU proposal of a common 

framework for crisis resolution.

Reform of clearing and trading obligations for OTC 

derivatives according to the EU timeline

The text of EMIR has been adopted by 

European Council and Parliament in 

February 2012. The European Supervisory 

Authorities (ESAs) will submit technical 

standards to the Commission by 30 

September 2012. The Commission is due 

to adopt the standards by the end of 2012. 

CCPs will have to apply for authorization 

within six months after the standards 

adoption.

Increase oversight and regulation of the shadow 

banking system according to the EU timeline

EU Directive on Alternative Investment 

Fund Managers (AIFM) and UCITS IV are 
Table: Policy Commitments by G20 Members FRANCE

21

being implemented. A consultation on the 

regulation of the shadow banking system 

has been launched by the Commission 

with a view to taking European regulatory 

initiatives in this area

Ensure regular and efficient activity of the Council for 

Financial Regulation and Systemic Risk, where all 

authorities responsible for financial stability meet to 

assess systemic risk and propose macro-prudential 

measures

Ensure that the financial 

system does not generate 

excessive risk for the 

economy, with emphasis on 

remuneration supervision, 

systemic risk taxation and 

housing markets risk 

Created in late 2010, the Council is already 

working on these issues. Three meetings 

took place in 2011 and one so far in 2012

Implement a structural reform of the banking sector in 

liaison with the EU timeline

Strengthen the resilience of 

the banking sector 

The European Commission will advice EU 

Member States on potential ways forward 

at Autumn 2012. 

Launch a Public Investment Bank Correct market failures to 

boost innovating small and 

medium companies (SMEs) 

and incentivize private 

investment in the tradable 

sector 

The Public Investment Bank will be created 

in early 2013. A mission led by the Minister 

of Economy will make its 

recommendations in late July 2012.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Launch a large consultation with the social partners 

this summer to define the content and timeline of a 

set of labor market reforms including a “generation 

contract” to increase the employability of young and 

senior workers 

Improve the labor market 

functioning and boost 

employment among young 

and senior workers 

Progress should be assessed through 

employment rate of the young and the 

senior workers 

Reform the corporate tax system to smooth implicit 

tax rates, which are actually higher for the SMEs than

for the large corporations and implement various 

measures in favor of the development of SMEs

Boost external 

competitiveness and 

employment by increasing 

the density of the network 

of innovative SMEs through 

removing barriers 

preventing them to grow

The tax aspects of the reforms will be 

addressed at autumn 2012, complemented 

with a dedicated legislative package
Table: Policy Commitments by G20 Members GERMANY

22

GERMANY

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress 

Increase fiscal sustainability in accordance with the G20 Toronto commitment. From 2014 onwards, general 

government budget will be balanced. General gross 

government debt-to-GDP ratio will decrease from 83.2% 

(2010) to 76% (2015). 

Reduce the structural general government deficit to a 

maximum of 0.5% of GDP by 2012 and in the mediumterm (German medium-term objective according to the 

EU Stability and Growth Pact).

At least halve the fiscal 

deficit. Stabilize or 

reduce public debt 

ratio.

Achieve a structurally 

balanced general 

government budget.

Consolidation progress fully on track: in 2011 

general government deficit decreased from 

4.3% in 2010 to 1.0% of GDP and general 

government debt ratio (Maastricht) decreased 

to 81.2

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress 

Implement Basel III. Implementation of EU Capital 

Requirements and Regulation Directive IV until end of 

2012.

Implementation of the 

agreed reforms 

remains key to make 

the system more 

resilient, to avoid 

regulatory arbitrage 

and to increase 

financial stability. A 

stable financial sector 

is a prerequisite for 

strong, sustainable and 

balanced growth. 

Negotiations at EU level ongoing.

Increase oversight and regulation of all relevant shadow 

banking activities including hedge funds. FSB proposals 

for enhanced regulation due in second half of 2012. 

Implementation of EU Directive on Alternative 

Investment Fund Managers until 7/ 2013. 

Implementation of reviewed EU Market Abuse Directive 

and Markets in Financial Instruments Directive when an 

agreement is reached.

FSB work ongoing according to schedule. EU 

consultation process launched in March 2012. 

National implementation will follow 

expeditiously once international/ European 

agreement has been reached, as necessary. 

Identification of G-SIFIs, increasing their loss absorbency 

and their effective resolution. Implementation of FSB 

recommendations on G-SIFIs according to agreed 

timetable. Extension of framework for G-SIFIs to 

domestic SIBs (D-SIBs) and systemically important nonbank financial entities in 2012.

Resolvability assessments, resolution planning, 

cooperation agreements underway; 

implementing Key Attributes of Effective 

Resolution Regimes following EU Crisis 

Management Directive. FSB, BCBS submitted 

progress report on D-SIBs in April, final report 

to be submitted in November; (provisional) 

methodology to identify systemically 

important insurance companies just launched 

by IAIS for public consultation and to be 

submitted by FSB and IAIS by February 2013; 

methodology to identify other non bank 

financial institutions to be submitted by FSB 

and SBBs by end 2012.

Increase transparency of financial markets by 

implementing a global Legal Entity Identifier (LEI) in 

accordance with the G20-Cannes commitment.

FSB work is ongoing according to schedule. 

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Strengthen further expenditures for education and 

R&D. Additional expenditures of 12 bn € from the 

federal budget in the period up to 2013.

Increase growth 

potential and 

employment.

On track for federal 12 bn. € spending. 

According to the EU-2020 strategy, the target 

of the federal government, the Länder and the 

private sector is to increase national spending 

on R&D to 3% of GDP by 2020. Another 

national target in the education sector is to 

reduce the drop-out rate to 10%, while 

increasing the share of the population aged 

30-34 having completed tertiary or equivalent 
Table: Policy Commitments by G20 Members GERMANY

23

education to at least 40%. Number of students 

with federally funded grants has doubled since 

2005.

Build infrastructure for energy supply. Change to renewable 

energies ensuring 

security of energy 

supply, affordability 

and sustainability.

Energy Package of summer 2011 contains 

several initiatives. 7 acts and 1 ordinance have 

been introduced and are now being 

implemented.

Modernize competition framework (merger control, 

unbundling, consumer rights). Improve railwayregulation.

Increase competition, 

including in the railway 

market.

Amendment of the Act against Restraints of 

Competition in preparation. New Act on 

Railway Regulation in preparation.

Increase labour market efficiency and employment 

opportunities. Further reforms to streamline labour 

market instruments. 

Draft law of 3/2011, effective spring 2012, facilitates 

recognition of qualifications acquired abroad. 

Since 5/2011, all workers from countries that acceded 

to the EU in 2004 no longer need a work permit. 

For occupations where demand exceeds supply 

immigration regulations were relaxed in 6/2011. 

Expanding scope of child-care will facilitate combining 

work and family life. 

Germany considers lowering personal income tax rates 

in particular for lower and medium incomes effective 

from January 2013, while respecting fiscal consolidation 

needs. Further reforms to streamline labour market 

instruments.

With the “Skilled Workers Strategy” the Federal 

Government will promote the availability of skilled 

workers in Germany along five specific paths: Labour 

market mobilization and safeguarding of jobs; 

combining family and career; education for all from the 

outset; skills development; integration and qualified 

immigration. 

The Federal Government expects that, on the basis of 

the current annual projection 2012, the contribution 

rate to the statutory pension insurance could be 

lowered again at the beginning of 2013.

Reducing labour 

market inefficiencies 

are of great 

importance to increase 

employment. While 

past reforms where 

predominantly about 

work incentives, the 

new reforms are 

primarily about 

enhancing labour 

market participation 

and better 

accommodating 

international labour 

migration and promote 

integration.

Assure the availability 

of skilled workers in 

Germany by increasing 

Germany’s 

attractiveness for 

highly skilled workers.

Lower labour costs, 

boost competitiveness 

and raise employment 

via the specific 

measures in the 

German programme of 

action for the Euro Plus 

Pact.

The main changes of labour market policy 

instruments to improve labour market 

integration opportunities and to facilitate 

recognition of professional qualifications 

acquired abroad entered into force on 1 April 

2012. Further relaxations for the admission of 

Romanian and Bulgarian workers took effect 

as of January 2012 (work permits not required 

for academics, trainees and seasonal workers 

for seasonal employment of not more than 6 

months). From 1 August 2013, every child 

from the age of one year will be legally 

entitled to daycare. By 2013, the federal 

government will have paid a third of the costs 

of the expansion, totaling €4 billion. From 

2014, the federal government will support the 

Länder by contributing €770 million annually. 

The legislation process on lowering personal 

income tax rates has not been completed yet.

A respective act on the “Skilled Workers 

Strategy has been introduced already.

Legislation will be under preparation in 

autumn 2012 as soon as relevant facts and 

figures will be available.
Table: Policy Commitments by G20 Members GERMANY

24

Increase support for developing countries. Help developing 

countries become new 

poles of growth.

Increase of ODA/GNI from 0.35% (2009) to 

0.39% (2010). In addition, Germany increases 

incentives to mobilise additional private 

investments for development and for partner 

countries to mobilise national resources. The 

merger of three technical cooperation 

agencies into one new organization in 2011 

will make Germany’s development 

cooperation more effective and responsive to 

the needs of its partners.
Table: Policy Commitments by G20 Members INDIA

25

INDIA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Central Government is committed to 

fiscal consolidation roadmap to 

reduce Fiscal deficit to 3.9% of GDP 

and Public Debt to 41.9 % of GDP 

Timeframe: By 2014 -15.

Prudent fiscal management 

to provide conducive 

environment for investment 

without undermining growth.

Fiscal Deficit and Public Debt estimated at 5.9% and 45.7% 

to GDP respectively in FY 2011-12. Fiscal deterioration has 

been conditioned by deceleration in growth coupled with 

persistently high inflation that has hit revenue. Fiscal 

consolidation remains medium-term priority of the 

Government.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

Market determined exchange rate 

with no predetermined target 

Timeframe: On continuing basis.

To help minimise external 

imbalances.

This commitment has already been substantially achieved. 

This is however making the exchange rate very volatile, 

mirroring the volatility in capital flows. The exchange rate 

of the Indian rupee against US dollar witnessed a sharp fall 

during August-December 2011. 

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Improve financial sector laws, rules 

and regulations, and to improve 

inter-regulatory agency 

coordination. 

Timeframe: Ongoing process with no 

specific timeline.

To promote financial stability 

for strong and sustainable 

growth by streamlining the 

financial sector laws, rules 

and regulations and bring 

them in harmony with the 

requirements of a modern 

financial sector. 

Government constituted the Financial Sector Legislative 

Reforms Commission on the 24th March 2011 to evolve a 

set of principles for governance of financial sector 

regulatory institutions and also to examine the case for 

greater convergence of regulations and streamline the 

regulatory architecture of financial markets. The 

commission is expected to submit its report by end of 

March 2013. 

Government has set up an apex-level Financial Stability and 

Development Council (FSDC) under the Chairmanship of 

the Finance Minister with a view to strengthen and 

institutionalise the mechanism for maintaining financial 

stability and enhancing inter-regulatory coordination.

To implement Basel III capital 

standards 

Timeframe: As per agreed timeline.

The RBI issued draft guidelines for implementation of Basel 

III Capital Regulation in India in December 2011 with, inter 

alia, an accelerated timeline for implementation by March 

31, 2017 as against the BCBS timeline of January 1, 2019. 

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Prioritize infrastructure investment 

and increase the role of PPP. 

Timeframe: Ongoing process with no 

specific timeline.

Promote environment for 

strong and sustainable 

Growth

While this is an ongoing objective, we expect to mobilise 

about $ 1 trillion of infrastructure investment during 2012 

to 2017. About half of this is expected to come from the 

private sector.

Introduce a general goods and 

services tax (GST). 

Timeframe: Ongoing process with no 

specific timeline.

Improve efficiency and 

reduce distortions in tax 

collection, and reduce 

compliance costs.

The Constitutional Amendment Bill, a preparatory step in 

the implementation of GST was introduced in Parliament in 

March 2011. It is right now before the Parliamentary 

Standing Committee.

UID. Over five years starting 2010-

11, the UID Authority plans to issue 

600 million UID.

Timeframe: Ongoing process

Make growth more inclusive 

and better targeting of public 

programmes.

The enrolments into the UID system have already crossed 

200 million.

Improve environment for FDI 

Timeframe: On continuing basis.

To promote strong and 

sustainable growth

FDI in single brand retail sector and in cash and carry 

wholesale trade permitted to the extent of 100 per cent. 
Table: Policy Commitments by G20 Members INDONESIA

26

INDONESIA

Fiscal Policy

Commitment/Timeframe Objective Update on Progress

Maintaining consistently low 

budget deficits (less than 3%) and 

debt to GDP ratio, and focusing 

government financing on domestic 

sources.

To improve fiscal sustainability and 

reducing impact from external shock.

Budget deficit was (1.3%)* to GDP in 2011, and 

debt to GDP ratio decreased to (25%)* in 2011. 

Domestic investors are holding around 70% of the 

Government bond (by March 2012)

(The state finance law limits the budget deficit 

the government can take for that particular year 

not more than 3%)

Improving design and effectiveness 

of spending (including revisiting 

subsidy mechanism and focusing 

budget more on capital spending), 

and improving the quality of fiscal 

decentralization.

Increasing spending efficiency and 

supporting stronger and more balanced 

growth across regions.

The budget structure has changed (having much 

larger allocation for capital spending). The 

Government is now allowed to adjust fuel price if 

the current price increases by 15% in six month

average and provide compensation to the poor to 

offset adverse impacts of high oil price.

(The progress is assessed through mandatory 

quarterly report of expenditure disbursement by 

line agencies and regional governments)

Accelerating the disbursement 

process for capital expenditures 

To achieve financing targets for 

development projects and to improve 

the quality of spendings of the budget 

both at national and regional levels.

All budget executing agencies and regional 

governments are required to provide quarterly 

reports on their capital expenditures with reward 

and punishment put in place.

Monetary and Exchange Rate Policies

Commitment/Timeframe Objective Update on Progress

Continuing flexible exchange rate 

policy and implement a policy mix 

consisting of monetary and 

macroprudential policies to manage 

inflation and capital flows volatility.

To achieve the medium term target of 

disinflationary path by gradually 

bringing down inflation rate to level 

with the regional figures and curbing 

massive capital flows to put in place 

macroeconomic stability as a 

fundamental for growth.

Bank Indonesia has been conducting 

accommodative MP since Q4-2011 (by keeping 

the BI rate at low level of 5.75%) in response to 

anticipated global economic slowdown. It allows 

GDP to grow above 6% (year on year) in Q4-2011 

and Q1-2012. Meanwhile, it successfully kept the 

inflation rate below 4.5% in Oct 2011 – May 2012. 

On macroprudential policy, BI has issued 

regulation (1) to require all export-proceeds be 

remitted through domestic banks and (2) to 

implement loan to value (LTV). The 

implementation of export-proceed remittances is 

aimed at strengthening (deepening) domestic 

foreign exchange market to reduce XR volatility 

and improve monitoring on international trade. 

The LTV is aimed to manage credit expansion as 

well as to enhance prudent lending activities. 

Regarding that those measures were just 

implemented, the impact on forex market volume 

(related to export proceed repatriation), credit 

growth (related to LTV).

To strengthen monetary operation, Bank 

Indonesia introduced forex term deposit which is 

aimed to provide forex investment outlet for 

domestic banks, to support forex market 

deepening which eventually would enhance 

monetary policy.
Table: Policy Commitments by G20 Members INDONESIA

27

Financial Sector Policy (Bank and Non-Bank)

Commitment/Timeframe Objective Update on Progress

Strengthening capital base of all 

banks in Indonesia as stipulated in 

the Indonesian Banking 

Architecture (IBA) blue print

To strengthen bank capital and liquidity 

standard to support financial sector 

stability.

Currently, all banks in Indonesia have met the 

minimum requirement to have paid-up capital of 

at least 100 billion Indonesian rupiahs.

Completing implementation of 

Basel II and commence 

observation on Basel III liquidity 

standards(LCR and NSFR)

To strengthen bank capital and liquidity 

standard to support financial sector 

stability

Implementation of Basel II regime has 

commenced since January 2012. And for Basel III,

Bank Indonesia is now undertaking observation of 

LCR and NSFR.

Enhancing financial system stability 

through the Financial System 

Safety Net Law.

Providing legal foundation for crisis 

management, and securing financial 

system to support macroeconomic 

stability as a fundamental for growth.

The operational structure of the National crisis 

management protocol framework (CMP) has 

been established that involves the Ministry of 

Finance, Bank Indonesia and the Deposit 

Insurance Agency.

Establishing The National Strategy 

for Financial Inclusion (NSFI)

To promote full access of unbanked 

people to financial services. Also to 

improve financial deepenings and 

intermediation to support growth.

The NSFI draft is expected to launch by mid 2012.

Publishing the details assessment 

results (DARs) of the Financial 

Sector Assessment Program (FSAP).

To strengthen adherence to 

international standards.

DARs of FSAP have been published since January 

2012. See the websites of IMF and the World 

Bank

Implementing Basel III capital 

regime

To strengthen bank capital and liquidity 

standards as well as to mitigate procyclicality

Preparation of Basel III implementation has 

commenced since January 2012. Bank Indonesia 

is now drafting a consultative paper for Basel III.

Developing secondary market for 

corporate bond and Sukuk (Islamic 

Sharia-based bond)

To increase the market liquidity aimed 

at increasing more transparency and 

attractiveness of corporate bond and 

Sukuk

Developing Global Master Repo Agreement 

(GMRA) for repurchase agreement market.

Enhancing market surveillance system for 

secondary market, and optimizing the role of 

Bond Pricing Agencies (BPA)

Developing Capital Market 

Infrastructure (i.e. Single Investor 

Identity/SID, Integrated Securities 

Trading System/Straight Through 

Processing/STP, Separation of 

Investor’s Asset Account from 

Securities Companies Account, and 

e-reporting system for issuers to 

report the disclosure information)

To implement a stable, resilient and 

liquid industry, in accordance with 

international standards, for increasing 

public confidence in the integrity of the 

industry.

In 2012, SID program will be introduced for 

Custodian Bank and Share registrar script 

clients.

STP has been in progress for risk engine and pre 

deal check system. The integration of SRO 

system with participants’ back office system is 

targeted to implement in 2012.

Enhancing securities companies’ back office 

system part of the initiative to separate 

Investors’ asset accounts from the securities

companies’ accounts.

Improving the quality of Insurance 

services and increase the 

tranparency of insurance market.

To increase consumer protection, 

proportionally and on target

The Government is proposing a new insurance 

law to be submitted to Parliament for approval by 

the end of 2012.

Adapting domestic regulations on 

counter financing of terrorism to 

comply with international 

standards and best practices

To meet the recomendation of FATF on 

combating the financing of terrorism in 

Indonesia

The Government is in the final stage of submitting 

the counter financing of terrorism law to 

Parliament for approval.
Table: Policy Commitments by G20 Members INDONESIA

28

Structural Reforms

Commitment/Timeframe Objective Update on Progress

Implementing the 2nd phase of tax 

administration reform, and custom 

administration reform.

To improve business climate and 

facilitating trade.

The Government is developing PINTAR (the Tax 

Administration Reform Project) aims to: (i) 

increase taxpayer voluntary compliance by 

lowering the compliance costs; and (ii) improve 

integrity and governance in tax administration.

(The progress is assessed by a Tax Oversight 

Commission based on the target achievement and 

tax complaints by public)

Accelerating infrastructure 

development, and promoting 

private sector involvement in 

infrastructure projects.

Addressing supply bottlenecks, improve 

competitiveness and improve private 

sector participation in the economy.

The Government has introduced a Master Plan 

for acceleration of economic development 

(MP3EI) to boost national connectivity, and 

capabilities in technology, and has stipulated the 

land acquisition process law to provide certainty 

to private investors in infrastructure 

development.

(National coordinating body for monitoring 

implementation of the Masterplan (MP3EI)

Strengthening and expand poverty 

reduction program under 4 

Clusters: family-based social 

assistance; community 

empowerment; economic 

opportunities for low-income 

households; providing basic needs 

with affordable price for low 

income people.

Reduce poverty level, creating stronger 

foundation for growth, and facilitate 

broader economic activities particularly 

among the most vulnerable

The Government has introduced PNPM (The 

National Program for Community Empowerment) 

which is a community based development 

program to help poor community, and has 

stipulated the new social saftey net law No. 

24/2011 where its transformation process has 

started since Jan 2012 and its full implementation 

will commence in 2014.

(The Government has established the National 

Team for the Acceleration of Poverty Reduction)

*Unaudited figures
Table: Policy Commitments by G20 Members ITALY

29

ITALY

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress 

Full implementation of the 

fiscal consolidation 

strategy and strengthening 

of the fiscal framework, in 

order to ensure sound 

public finances and 

reinforce the credibility of 

the fiscal framework.

a) Achievement of a structural 

balanced budget and a rapidly 

declining debt-to-GDP ratio.

b) Introduction and 

implementation of the 

balanced budget rule in the 

Constitution.

a) In December 2011, a supplementary fiscal package worth 

1,3 per cent of GDP was approved, bringing the total fiscal 

consolidation approved in second semester to about 5 per 

cent of GDP. The supplementary package also introduced 

measures that are structural (a landmark reform of the 

pension system), growth-friendly (shift of taxation from 

production to unearned income, reduction of the tax 

wedge on labour) and equitable (fight against tax evasion). 

Therefore, the net borrowing is expected to be 

significantly below 3 per cent of GDP in 2012 and the 

medium-term objective, a balanced budget in structural 

terms, is expected to be achieved in 2013. The debt-toGDP ratio is set to decline accordingly, starting in 2013.

b) Approved through Constitutional Law n.1/2012 (dated 

April 2012). By February 2013, adoption of the 

implementing legislation.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress 

The resilience of the 

financial system and its 

ability to finance the real 

economy.

a) To support the adoption of 

Basle III by the EU and its 

timely domestic 

implementation.

b) To strengthen banks’ capital.

a) The general approach on the Basel III package was 

approved by the EU Council on 15 May 2012. By 1° 

January 2013, national rules are expected to enter into 

force.

b) The Italian banks are raising their capital adequacy ratios 

(EBA’s recommendations). 

To strengthen the 

regulatory framework to 

enhance investor 

protection, increase 

financial stability and 

ensure the orderly 

functioning of the markets.

a) To adopt the EU Directives on: 

1) financial services sectorial 

legislation; 2) Undertakings for 

Collective Investment in 

Transferable Securities; 3) 

prospectus and transparency; 

4) Alternative Investment Fund

Managers.

b) Full implementation of the new 

EU regulatory framework on 

OTC derivatives (EMIR), Shortselling and CDS and Credit 

Rating Agencies.

c) To support the timely adoption 

of the Mortgage credit 

Directive by the EU.

a) Work is on‐going and set to be completed by, respectively, 

2012 (n. 1), July 2012 (3) and July 2013 (4). The UCITS 

Directive has already been implemented by Italy.

b) By end 2013 at the latest following the calendar agreed at 

EU level.

c) By 2012.

To facilitate access to 

medium-long term funding 

by banks.

A guarantee scheme for banks 

liabilities in line with EU 

regulations.

The scheme was introduced in December 2011 for a six months 

period. A review is scheduled to take place by mid-2012. The 

Ministry of Economy and Finance and the Bank of Italy will 

monitor half-yearly the results of the scheme.

To reduce costs and 

enhance consumers 

participation. 

Full implementation of the EU 

recommendations on basic 

payments account.

The legislative provision was approved last December, and so 

was last March the implementing convention among the 

Ministry of Economy and Finance, the Bank of Italy and the 

private sector involved. Payment services providers will 

provide a reliable and comprehensive set of information on 

accounts and charges on an annual basis. 
Table: Policy Commitments by G20 Members ITALY

30

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

To increase the 

competitiveness of the 

economy.

a) reduction of the North-South 

dualism, by a comprehensive 

review of European structural 

funds program (Eurosud Plan);

b) a comprehensive public 

spending review;

c) a reform of the fiscal and 

welfare systems;

d) liberalization in retail and 

professional activities and in 

the energy sector, privatization 

of local public services, 

enhancement of consumer 

protection and Antitrust 

Authority’s powers of 

intervention, establishment of 

the Transport Authority.

e) reforming the labor market, 

particularly by the support to 

decentralized (firm level) and 

productivity linked wage 

negotiations, and change in 

hiring and dismissals rules and 

procedures;

f) restructuring of the justice 

system;

g) reforming the public 

administration, particularly by 

empowering the local 

authorities, cutting red tape, 

reducing unnecessary burden 

on business activities and 

through labor flexibility;

h) promoting and optimizing 

human capital, particularly by 

increasing accountability and 

autonomy of universities and 

schools;

i) supporting innovation and 

entrepreneurship also through 

tax incentives for 

capitalization;

j) speeding up the infrastructure 

development, mainly by 

regulatory measures to 

facilitate project financing.

a) Action Plan approved in November 2011 to reprogram the 

use of the European Structural Funds to support education, 

digital agenda, railways, employment. In the period 2014-

2020, €3.7 billion of structural funds will be used;

b) The kick-off report was published in January 2012 and 

specific measures were legislated in May. The process is 

on-going on each expenditure program. A Commissioner 

has been appointed and a Ministerial Committee has been 

established. The target is to achieve €4.2 billion savings in 

the period June-December 2012 (€7.2 on yearly basis).

c) Partly included in the December fiscal package and in the 

draft bill on labor market, expected to be approved shortly, 

and draft enabling act on tax reform, adopted by the 

Council of Ministers in April 2012.

d) a broad package of measures has been approved on 

liberalization in local public services, retail activities, 

pharmacies, professions, fuel distribution, banks and 

insurances. On the energy sector, the Prime Minister 

decree approved on May 2012 defines modalities and 

timeframe for the ownership unbundling between the 

service and network operator in the gas sector. By 18 

months the gas incumbent will have to surrender its share 

(52%) in the gas network. Antitrust powers have been 

strengthened, while the establishment of the Transport 

Authority is expected by summer 2012. On consumer 

protection legislated measures have been approved to 

make class actions more effective, to introduce protection 

from deceptive and aggressive trade practices (also for 

businesses with less than 10 employees), as well as on bank 

deposits and car insurance regulation;

e) partly included in the 2010 and 2011 fiscal packages and 

partly in the draft bill on labor market, expected to be 

approved shortly by the Parliament. Key features include 

the revision of: non-standard contracts, by strengthening 

the vocational training component; unemployment 

benefits, with the introduction of a new form of income 

support; dismissal rules and procedures;

f) Legislated measures on the reorganization of the courts 

geographical distribution, with the aim of raising the 

efficiency of the system. Special courts for businesses have 

been set up. A specific action to reduce the burden of 

litigation has been adopted with the mandatory 

conciliation attempt (tentativo obbligatorio di 

conciliazione) in civil and commercial fields; 

g) A braod package of simplification measures have been 

adopted, together with measures for the speeding up of 

late payments by the public administration to firms. An 

SMEs’ Envoy has been appointed, in order to ensure the 

administrative burden simplification for SMEs. 

h) the ‘Merit Fund’ for loans to students and the system of 
Table: Policy Commitments by G20 Members ITALY

31

excellence for university professors have been legislated, 

together with the accountability and autonomy of schools;

i) Legislated measures on the tax allowance for corporate 

equity (ACE), a credit facility for SMEs and tax credits for 

R&D investments, together with the Italian Digital Agenda;

j) Legislated measures so as to attract private investments, 

though regulatory simplification, the speeding up of 

authorizations and the introduction of the ‘project bonds’.
Table: Policy Commitments by G20 Members JAPAN

32

JAPAN

Fiscal Policy

Commitment/Timeframe/Measure Objectives Update on Progress

‐ For the national and local governments’ primary 

balance, the deficit ratio to GDP shall be halved from the 

ratio in FY 2010 by FY 2015 at the latest, and the surplus 

shall be achieved by FY 2020 at the latest.

‐ From FY 2021, a stable reduction in the ratio of public 

debt to GDP for both national and local governments 

shall be maintained.

‐ Flesh out the “Definite Plan for the Comprehensive 

Reform of Social Security and Tax” which sets out 

policies including gradual increase in the consumption 

tax to 10% by the middle of 2010's and submit the bills 

by the end of FY2011 to realize these policies.

Fiscal 

consolidation

‐ Aiming at simultaneous achievement of securing

stable resources for social security and

consolidating public finances, the Cabinet decided

on “the Outline of the Comprehensive Reform of

Social Security and Tax” that includes the staged

increase of the consumption tax (from 5% to 8% in

April 2014, and to 10% in October 2015) on 17th

February, and submitted the requisite bill on tax

reform to the Diet on 30th March of FY 2011.

‐ The Medium‐term Fiscal Framework is to be 

formulated every year to provide fiscal framework for 

the subsequent three years, thereby taking measures 

both on revenue and expenditure sides as well as 

restraining the amount of new government bonds issue. 

(The Framework decided in August 2011 covers the 

three‐year period between FY 2012 and FY 2014.)

‐ The FY 2012 budget complied with the Mediumterm Fiscal Framework decided in August 2011.

‐ While implementing substantial fiscal measures for 

reconstruction from the earthquake, necessary fiscal 

resources shall be secured partly through efforts to 

economize on expenditures and to secure non‐tax 

revenues. The remaining gap shall be filled by 

temporary taxation measures, thereby achieving fiscal 

sustainability. 

(note) The volume of these fiscal measures are 

estimated at least 19 trillion yen (equivalent to about 

4% of GDP), including fiscal measures already taken, in 

five years.

‐ Approximately 18 trillion yen of fiscal measures

for reconstruction from the earthquake has been

appropriated by the first, second and third FY 2011

supplementary budgets and by the FY 2012

budget. The necessary fiscal resources were

secured, not through issuances of deficit‐financing

bonds, but through raising individual and corporate 

income taxations temporarily as well as cutting 

expenditures and securing non‐tax revenues.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

‐ Implement OTC derivatives market reforms including 

mandatory CCP clearing, as well as mandatory storing 

and reporting of OTC derivatives trade information. 

Enforce the amended Financial Instruments and 

Exchange Act and relevant Cabinet Ordinances by 

November 2012, and take other necessary actions.

Implement the

internationally

agreed financial

regulatory

reforms

‐ The government issued for public consultation on

27th April 2012 the draft Cabinet Ordinances that

specify details for mandatory CCP clearing, as well

as mandatory storing and reporting of OTC

derivatives trade information. The consultation

period ended on 28th May. The Ordinances are

under preparation for proclamation by this

summer.

‐ The government submitted to the Diet on 9th

March the amendment to the Financial

Instruments and Exchange Act that requires using

electronic trading platform for eligible OTC

derivative trades.
Table: Policy Commitments by G20 Members JAPAN

33

‐ Proceed with phased‐in implementation of Basel III 

following the schedule agreed by the Basel Committee 

on Banking Supervision, starting in 2013.

‐ To implement Basel III from the end of fiscal year 

2012 (end of March 2013), the revised 

administrative notice on the capital adequacy rules 

for internationally active banks was published on 

30th March 2012.

‐ Implement other financial regulatory reforms agreed 

by the G20 according to the agreed schedule.

‐ The government is taking necessary steps to 

implement agreed financial regulatory reforms, 

including the work on the resolution of G‐SIFIs such 

as the development of the recovery and resolution 

plans in line with FSB “Key Attributes of Effective 

Resolution Regimes”.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

‐ Achieve strong growth by accelerating efforts to 

implement the “New Growth Strategy” formulated last 

year, and by enhancing the strategy with the 

formulation of “innovative strategy for energy and the 

environment” in response to the aftermath of the 

Earthquake, thereby realize the average growth rate 

between FY 2011 and FY 2020.

‐ By steadily proceeding with the “New Growth 

Strategy” and the “Strategy for Rebirth of Japan”, 

implement structural reforms such as:

> pursue strategic and multifaceted economic 

partnerships with a wide variety of countries

> create new industries and new markets through 

innovation in the areas such as environment and 

healthcare

> develop human resources of the next generation and 

create society which further facilitates labour force 

participation by women etc.

> expand the supply of growth money

‐ With a view to developing the new strategy for rebirth 

of Japan by the middle of 2012, prepare specific policy 

actions together with numerical goals, target dates, time 

schedules and so on.

‐ Building on the lessons learnt from the earthquake and 

nuclear incident, the new “Strategy for Energy and the 

Environment” will be formulated around this summer.

About 3% nominal 

growth rate and 

about 

2% real growth 

rate

‐ Efforts to implement policy measures included in

the “New Growth Strategy” have been accelerated. 

Facing new challenges brought about by the Great 

East Japan Earthquake, the Cabinet decided on the 

“Strategy for Rebirth of Japan” on 24th December 

2011.

‐ In May this year, a follow‐up of all 376 measures

included in the "New Growth Strategy" was

conducted to strictly examine their effects and

outcomes. The measures to address the problems

identified through this exercise will be reflected in

the new strategy for rebirth of Japan to be

developed by the middle of 2012.

‐ To prepare for the formulation of the “Strategy 

for Energy and Environment”, the “Basic Principles 

towards Proposing Options for the Strategy for 

Energy and the Environment” was decided on 21st 

December 2011, which include the following:

> less dependence on nuclear power generation

> measures against global warming in a way that 

contributes to reduce global emissions

> development of green growth strategy
Table: Policy Commitments by G20 Members SOUTH KOREA

34

SOUTH KOREA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress 

Achieve balanced budget 

and reduce public debt to 

GDP ratio(2011-2015)

Reach balanced budget by 2013, excluding 

social security fund. Reduce public debt-toGDP ratio to pre-crisis level by 2015.

Consolidation progress on track. In 2011, fiscal deficit 

and public debt to GDP ratio dropped to 1.1% and 

34.0%, respectively. 

Increase revenue by streamlining exemptions & 

reductions under national tax exemption rate 

(13.4% for 2012), and by expanding taxation on 

omitted tax bases. Expenditure cut (10%) 

applies to projects lagging behind in 

performance.

Expanded tax revenue in line with government’s 

taxation policy direction of ‘broad base and low rates’. i) 

Reached national tax exemption rate of 13.7% by 

reducing non-taxable and tax-exempt sources worth 1.3 

trillion KRW in 2011. ii) Strengthening transparency of 

tax base. iii) Ongoing efforts to create new tax bases 

with outcomes such as imposing tax on new financial 

products (Jan 2012). Promoting expenditure efficiency 

including by cutting 10% of budget for 145 underperforming projects after assessment of all fiscal 

projects of 2010.

Along with these measures, the standard for 

fiscal statistics will be upgraded from 1986 GFS 

to 2001 GFS.

To enhance credibility of statistics, implemented 

2001GFS Manual and will publish fiscal statistics under 

the new standard from end-2012.

Prepare against risk 

factors of public finance 

(medium-term)

Prepare a long-term fiscal outlook toward 2060 

by 2013, in which areas that heavily affect 

long-term finance (such as pension, health 

insurance) will be incorporated. Manage fiscal 

sustainability of local governments including by 

implementing the Local Finance Early Warning 

System.

Established a Long-term Fiscal Outlook Council (Dec 

2011) 

Set up Local Finance Early Warning System (Sep 2011)

Anchor short-term 

recovery

Strengthen automatic fiscal stabilizers while 

maintaining medium-term fiscal soundness

Temporarily increase level of employment maintenance 

subsidies when labor market deteriorates with incidence 

of massive job losses (temporary shutdown, leave of 

absence allowance 2/3 → 3/4). Front load 60% of 

budget in the first half of 2012 as a means for finetuning.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress 

Pursue capital market 

development plan

(2011-2012)

The plan aims to foster domestic investment 

banks, reform capital market infrastructure, 

and improve market conditions for corporate 

finance.

Submitted to National Assembly newly revised Capital 

Market Consolidation Act (in Nov 2011) containing 

additional reform measures for the advancement of 

financial system.

Reduce capital flow 

volatility (Flexible basis)

Under limited circumstances agreed at the 

Seoul Summit, use macro‐prudential measures 

that are carefully designed.

i) Established ceiling on bank FX derivatives positions 

(took effective on Sep. 2010) 

ii)Imposed Bank levy on bank’s non-deposit foreign 

currency liabilities (took effective on Aug 2011) 

iii) Restoring withholding tax on foreign holders of KTBs 

and MSBs (took effective on Jan 2011)

Expand financial aid to 

vulnerable groups with 

low-income and lowcredit

Expand the scope of beneficiaries of 

government’s 3 major microcredit programs 

(Smile Microcredit, Sunshine Loan, New Hope 

Loan) to lower the financial costs of the lowincome class and strengthen financial safety nets. 

Step up efforts to help credit recovery of 

vulnerable groups such as through debt 

restructuring and transfer loans that switch the 

Comprehensive Measures to Strengthen the Foundation 

for Microfinance (Apr 2011)
Table: Policy Commitments by G20 Members SOUTH KOREA

35

interest rates of outstanding loans to lower ones.

Strengthen resilience of 

banking sector including 

by implementing Basel III 

(2012-2019)

Reduce bank liquidity risks and prepare to 

implement Basel III including through revised 

Provision of Banking Supervision.

Enforced regulation of banks’ loan-to-deposit ratio to 

100% and under from July 2011

Completed the revision of Enforcement Decree of the 

Banking Act (Dec 2011)

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Enhance productivity in 

service industry (2011-

2012)

Deregulation will focus on the education and 

tourism service sectors.

Market competition will focus on lowering the 

entry barrier for certified lawyers, judicial 

scriveners at this early stage.

Develop package deal to reduce disparities 

between service and manufacturing sectors 

with institutional improvements. Develop 

comprehensive plan to facilitate R&D in service 

industry.

Service sector deregulation in progress for permitting 

foreign educational institutions to conduct business in 

Korea and developing marine tourism industry.

Spur competition in professional service market by 

revising Attorneys-at-Law Act and establishing measures 

to advance accounting services.

Introduce multiple labor 

unions (2011)

Step up various efforts on promotion, guidance 

and training for implementation of the 

recently introduced “Paid Time‐off System” 

and “Multiple Trade Unions.”

Enhanced labor efficiency via improved labormanagement relationship, reduction in labor disputes 

(121 cases in 2009 → 65 cases in 2011) and working 

days lost (626,000 days in2009 → 429,000 days in 2011) 

with smooth implementation of those systems. 

Pursue measures to 

increase women’s labor 

participation rate

(medium-term)

Improve holiday and leave system for a 

balanced work‐child rearing life, actively 

promote use of childcare facilities in 

workplaces, enhance support for women’s 

employment and job training.

Expanded supply and demand of women’s employment 

by supporting part-time job creation (2010-) and 

through revised law on supporting gender equality in 

employment, work-life balance (Dec 2011)

Reduce labor market 

dualism by strengthening 

protection for non-regular 

workers (medium-term)

Strengthen protection for non-regular workers 

by reinforcing social safety nets, enforcing nondiscrimination guideline, and increasing 

opportunities to convert to regular 

employment. Ensure successful anchoring of 

these measures by providing guidance, 

supervision, training and consultation.

i) Announced Comprehensive Measures for Non-regular 

workers(Sep 2011)

ii) Announced Measures for Non-regular workers in 

Public Sector(Nov 2011)

iii)Developed Guideline for Reducing Discrimination in 

Salary and Working Conditions(Nov 2011)

Job creation

(medium-term)

Boost youth employment by supporting youth 

business start-ups, strengthening tax and other 

incentives for companies employing youths 

and mitigating employment mismatches.

Launched business start-up funds exclusively for young 

entrepreneurs

More internship opportunities on public firm and SMEs

Reinforced job training including in Meister Schools

Pursue reforms to 

facilitate green growth

(2011-2020)

Achieve national target to cut green house gas 

emissions by 30% below BAU (Business As 

Usual) levels by 2020.

Develop institutional grounds to enforce 

emissions trading system, including the fees 

and quotas of trading rights allocation.

Set GHG emission cut targets by sector and industry to 

reach national target (July 2011)

Phasing in implementation of GHG & Energy Target 

Management Scheme (launched in 2012). Expand 

applicable firms from firms emitting over 20,000tons 

(2012) to those emitting at least 15,000tons (2014). 

Double R&D investment in green technology 

from 2008 to 2012.

Delivered on commitment to double R&D investment in 

green technologies by 2012, upgrading 27 green 

technologies.
Table: Policy Commitments by G20 Members MEXICO

36

MEXICO

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

At the end of 2009, a fiscal consolidation strategy 

for 2010 – 2012 was announced and it has been 

implemented. In light of revisions to 

expectations of global and domestic growth 

during 2011, the consolidation objective was 

maintained but adjusted to have a more gradual 

convergence to a balanced budget. Looking 

ahead, if the economy performs as expected, the 

pace of gradual fiscal consolidation will continue. 

The measure will be ratified at end 2012 when 

the budget for 2013 is approved.

To provide a fiscal stimulus 

to economic activity as 

output remains below its 

potential level, while 

simultaneously 

guaranteeing the 

sustainability of public 

finances.

A gradual fiscal consolidation has been taking 

place since 2010. Continuing with the strategy, 

the budget which was approved at the end of 

last year for 2012 implies that the Federal 

Government will have a lower deficit in 2012 

compared with the one in 2011. However, it will 

not go all the way to a balanced budget as 

originally envisaged given that the output gap 

will not have closed as previously projected. This 

effectively ensures the operation of automatic 

fiscal stabilizers. The balanced and gradual 

consolidation strategy will continue in 2013 

given current growth perspectives. Progress is to 

be measured on the basis of the evolution of the 

Public Sector Deficit as a percent of GDP 

excluding Pemex’s investment, consistent with 

Mexico’s fiscal rule.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

Maintain a flexible exchange rate regime and an 

inflation targeting framework for monetary 

policy.

Assure price stability and 

freely floating exchange 

rates.

Currently in place. They can be assessed by the 

classifications of exchange rate (floating 

exchange rate regime) and monetary policy

regimes (inflation targeting framework) 

prepared by the IMF.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

The early adoption of several components of the 

Basel III accord, the adoption of Solvency II 

consistent with EIOPA guidelines, and an 

acceleration of the strategy to increase access to 

credit for housing, small and medium sized firms, 

agriculture and infrastructure through the 

development bank system. By end 2012, 

commercial banks should be fully compliant with 

the new capital requirements and credit by 

development banks should have increased 

significantly.

Continue with the implementation of the 

elements in the international reform agenda. 

New requirements on liquidity and leverage rules 

consistent with Basel III will be implemented 

according to the timeline established by the BIS 

and FSB. New regulation on OTC derivatives is 

expected by end 2012; the proposal will include 

standardization and central clearing of some OTC 

derivatives, and enacting regulation for 

repositories.

To strengthen the stability 

of the Mexican financial 

system, and channel 

financial resources to 

strategic sectors in terms of 

financial inclusion, job 

creation and poverty 

reduction to contribute to 

achieve sustainable growth.

A detailed regulatory proposal for new capital 

requirements consistent with the Basel III accord 

has been completed and is expected to be 

published by mid 2012. At end-2011 and the first 

quarter of 2012, credit programs of 

development banks were enhanced. Direct and 

induced credit by development banks grew by 

5.6% in real annual terms as of December 2011, 

compared with a rate of growth of 0.5% in 2010. 

On the regulatory measures, progress should be 

measured by the degree of compliance of 

commercial banks with the new capital 

requirements. 

On the expansion of credit by development 

banks, progress should be measured by the 

annual rate of growth of direct and induced 

credit by development banks at end-2012.
Table: Policy Commitments by G20 Members MEXICO

37

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

In addition to those already carried out or 

submitted to Congress, such as the approved 

changes to the competition law, the following 

actions will take place: increase investment in 

the energy sector, policies to deregulate and 

reduce the costs of starting and operating a 

business, increase competition and continue 

with a unilateral strategy of reducing trade 

barriers. The tariff reduction process is currently 

in place, the rest of the measures will be 

implemented in the second half of 2012.

Investment in infrastructure will continue to be 

promoted both through budget prioritization and 

through changes to the regulatory and legal 

framework. The social safety network will also be 

reinforced. Enactment of the reforms will take 

place during 2012.

To increase the growth 

potential of the Mexican 

economy by adopting 

policies which enhance 

productivity growth and 

increase investment.

Facilitating private sector 

participation in 

infrastructure projects and 

providing legal certainty for 

all parties, promoting the 

development and 

construction of 

infrastructure projects. 

Promote investment and 

efficiency in the energy 

sector. 

Strengthen the 

effectiveness of the social 

security network and 

increase the attractiveness 

of formal employment for 

workers.

In January 2012, PEMEX announced a second 

auction of contracts with the private sector that 

includes 6 fields to be allocated in 3Q-2012. 

PEMEX will continue and further accelerate the 

use of new contracts with the private sector in 

order to increase investment in the energy 

sector. Regarding trade policy, during 2012, the 

tariff reduction process has continued: the 

average tariff for final goods decreased by 4.4 

percentage points with respect to 2011, 

accumulating a reduction of 15.1 percentage 

points with respect to 2008. 

In 2012 a new Law on Public-Private 

Partnerships was approved. It envisages: i) 

integrating all the relevant regulations in a single 

instrument; ii) includes comprehensive contract 

awarding (for construction and operation), and 

iii) speeds up permits procedures. 

Reform to the housing subaccount of the social 

security system: workers would be entitled to 

receive resources in their housing subaccount 

upon their retirement, if they did not receive a 

mortgage during their active lifetime; eliminates 

the restriction of one mortgage per worker 

during the lifetime, for workers who have repaid 

their initial mortgage; allows partnerships 

between Infonavit and the private sector for cofinancing a worker ́s second mortgage.

Progress on higher investment in the energy 

sector should be measured by a successful 

auction of contracts by PEMEX during the second 

half of 2012 and by additional increases in 

investment and use of contracts in 2013. Policies 

to deregulate and reduce the costs of starting 

and operate a business can be measured using 

the World Bank’s Doing Business Report. 

Progress on tariffs can be measured through the 

evolution of the average MFN tariff. 
Table: Policy Commitments by G20 Members RUSSIA

38

RUSSIA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress 

Gradual decrease and 

restriction of the 

Government budget deficit 

(2013-2015)

Approximately “minus” 1,5-2,0% of 

GDP

In 2011 the federal budget completed with a slight surplus 

0,8% of GDP mainly because of unexpected high oil windfalls; 

in the current and forthcoming years we expect the budget 

deficit to meet the targeted level. 

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress 

Reducing inflation and 

maintaining it at a level 

ensuring conditions for 

long-term sustainable 

economic growth (2011-

2013)

Reducing and maintaining inflation 

(CPI) at the level of 5-7%

In 2011 inflation was reduced to 6,1% (on December to 

December basis). The Bank of Russia is planning to gradually 

reduce this indicator to 5% or below by 2014.

Increasing the flexibility of 

exchange rate

Expanding the floating band of 

fluctuation of the ruble with regard 

to the bi-currency basket (euro – US 

dollar)

Russia has been pursuing transition to more flexible exchange 

rate regime since February 2009. The Bank of Russia decided 

to abandon practices of setting up exchange rate targets and 

fixed corridors. Exchange rate policies have been carried out 

in the framework of so called “operational interval” for the bicurrency (euro-dollar) basket, its borders being adjusted in 

accordance with the interventions performed by the Bank of 

Russia. 

In 2011 the Bank of Russia widened the floating operational 

band of ruble’s fluctuation with regard to the bi-currency 

basket from 4 to 6 rubles (initial value was 2 rubles) and 

increased its flexibility by reducing from $650 million to $500 

million the cumulative amount of its interventions, which 

results in a 0,05 rubles shift of the operational band limits.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress 

Stimulating development 

of the banking sector (till 

2016)

As of January 1, 2012 the current dynamics of key banking 

sector parameters was in line with the target (except for the 

slowed pace of banks capitalization). 

Increasing credit volumes to nonfinancial organizations and 

individuals: 55-60% of GDP

Currently - credit volumes to non-financial organizations and 

individuals: 42,8% of GDP

Increasing banking sector assets: 

more then 90% of GDP

Currently - banking sector assets: 76,6% of GDP

Increasing banking sector 

capitalization: 14-15% of GDP

Currently - banking sector capital: 9,6% of GDP.

The Russian Government and the Bank of Russia are taking 

measures to increase the national banking system’s capital 

base.

Since January 1st, 2012 the Federal Law No. 391-FZ, dated 

December 3, 2011, “On Amending Federal Law on Banks and 

Banking Activities” has come into force the minimum 

authorised capital for a newly registered banks is determined 

at 300 million rubles (about USD 10 million) and the minimum 

equity capital for the former banks at 300 million rubles 

beginning from January 1, 2015.
Table: Policy Commitments by G20 Members RUSSIA

39

This measure is enhancing financial stability of the banking 

system as a whole and, along with other measures promoting 

capitalization, aimed at implementation of provisions 

provided by the Russian Banking Sector Development 

Strategy until 2015.

Improvement of legislation 

in terms of raising 

standards for disclosure of 

information by financial 

institutions, consolidated 

supervision, strengthening 

financial markets’ 

infrastructure and 

regulation, etc. (mediumterm run)

Adoption and addition of relevant 

laws and regulations

The following laws were adopted in 2011: 414-FZ “On Central 

Depository” (determined the status of central depository and 

specifics of its regulation); 7-FZ “On Clearing and Clearing 

Activities” (introduced the concept of central clearing 

counterparty and determined specific requirements for it); 

325-FZ “On Organized Trading” (established the uniform 

regulatory arrangements for the organized trading in all 

segments of the Russian financial market); 161-FZ “On 

National Payment System” (established the regulation for the 

payment service market including activities of electronic 

money systems); 122-FZ “On modifying Legislation on 

Securities Market and Provisions 214.1 and 310 of Part 2 of 

the Tax Code” (simplified the procedure for obtaining income 

on securities subject to mandatory centralized custody).

In view of instability in global economy and potential risks of 

financial markets’ turmoil and to continue implementation of 

preventive anti-bankruptcy policy by the Bank of Russia and 

the Deposit Insurance Agency, the Federal Law No. 175-FZ, 

“On Additional Measures to Strengthen Stability of the 

Banking System until December 31, 2011” was extended till 

the end of 2014.

NSIB (national systemically 

important banks) and 

SIFMI (systemically 

important financial market 

infrastructures) regulation 

improvement (2012-2013)

Specifics of regulation proposals Ongoing

Development of recovery plans by 

NSIB and SIFMI

To be developed during the second half of 2012

Development of NSIB and SIFMI 

resolution plans by the Bank of 

Russia

To be completed in the first half of 2013

Determination of required changes 

in national legislation

Interagency agreement will be initiated in the second half of 

2012; final proposals will be prepared in early 2013. 

Strengthening crossborder cooperationDevelopment of amendments to 

financial legislation for strengthening 

cross-border cooperation between 

the Bank of Russia and foreign 

supervision authorities in the area of 

information exchange

To be completed by the end of 2012

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Labour market

Labour market recovery has been stronger than expected. 

Seasonally adjusted unemployment rate has reached 5,9% in 

March 2012 though regional differences persist. Employment 

Promotion Programme has been being developed since late 

2011 which will effectively set final targets and policies for the 

mid- and long-term labour market development. Programme 

is expected to be finalized in late 2012.

Reduction in 

unemployment rate

Unemployment rate reduced from 

7,7% in 2010 to 6,3% in 2013 and to 

5.6% in 2015

Increased labour mobility

and reduction of 

unemployment spells

Unemployment spell is expected to 

go down 
Table: Policy Commitments by G20 Members SAUDI ARABIA

40

SAUDI ARABIA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Continue implementing the enhanced 

investment program, which entails 

significant expenditures on the social 

sectors and infrastructure. In addition, 

continue implementing the package of 

measures announced in early 2011 

aimed at strengthening the social safety 

net, creating job opportunities for the 

youth, and meeting demand needs for 

housing.

The main objective is to 

support public spending on 

productive sectors such as 

education, health, 

infrastructure, housing, as 

well as on strengthening the 

social safety net. This 

expansion in public 

spending, in line with fiscal 

sustainability 

considerations, is aimed at 

achieving sustained high 

economic growth.

The National Budget for 2012 continues to focus on 

enhancing the development process and ensure that the 

investment programs remain conducive to strong and 

sustainable economic growth. The budget puts emphasis 

on optimizing the use of available resources and giving 

priority to projects that ensure balanced development as 

well as more employment opportunities and job 

creation.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

The Saudi Arabian Monetary Agency 

(SAMA) is committed to pursuing 

accommodative monetary policy.

To ensure adequate liquidity 

in the banking system.

Saudi Banking system is well capitalized and highly 

liquid.

Financial Sector Policy

Commitment Objectives Update on Progress 

Regulatory reforms to further strengthen 

existing risk-based banking supervision 

are continuing. 

SAMA is committed to implement the 

Basel III Reforms on timelines agreed by 

the Basel Committee.

Work is ongoing to support the 

development of the insurance sector, 

which includes: issuing regulations, 

enforcing compulsory insurance, 

supervising insurance companies, 

building capacity and expertise of 

insurance industry professionals, and 

enhancing public awareness.

These measures will ensure 

continued strengthening of 

a sound, profitable and well 

capitalized financial sector.

The full implementation of 

the Basel III framework 

should further strengthen 

the risk management, 

liquidity and capital 

adequacy framework in the 

banking sector. 

Growth in the insurance 

sector provides greater 

efficiency in the overall 

allocation of capital and mix 

of economic activities, and 

increases productivity.

SAMA has continued to enhance its Risk based 

Supervisory system by adopting and implementing the 

regulatory standards issued by the Basel Committee and 

other standard setters. 

SAMA has fully implemented all three Pillars of Basel II. 

For Basel II.5 SAMA has a plan to complete its 

implementation before the end of 2012. On Basel III 

implementation SAMA has introduced a capital leverage 

ratio in 2011 and the Liquidity Coverage and Net Stable 

Funding Ratios in January 2012.

Various steps have been taken to further support the ongoing development of the insurance market in the 

Kingdom. In terms of issuing regulations, SAMA has 

continued issuing insurance-related regulations, the 

latest of which include:

1. Intermediaries Regulations,

2. Online Insurance Activities Regulation, and

3. Investment Regulation

SAMA also updated the Anti-Money Laundering and 

Combating Terrorist Financing Rules (that are applicable 

to the insurance market).

On the issue of enforcing compulsory insurance, SAMA 

updated the Unified Compulsory Third Party Liability 

Policy and it will be applied in the market in March 2012.

With respect to supervision, SAMA continued 

strengthening its capabilities to cover all supervisory 
Table: Policy Commitments by G20 Members SAUDI ARABIA

41

Strengthening of market infrastructure 

by undertaking new initiatives is 

continuing.

Strengthening of market 

infrastructure requires 

specific initiatives in the 

following areas:

● OTC derivatives

● Compensation

● Reducing reliance on CRAs

aspects using offsite as well as onsite tools.

SAMA has also continued to work with the Institute of 

Banking and the insurance market (through a dedicated 

committee) to strengthen training available to the 

insurance market which will help develop the capacity 

and expertise of the insurance professionals. 

As regards Over the Counter Derivatives (OTC), Banks in 

Saudi Arabia deal primarily in plain vanilla derivative 

products which are used for risk management purposes, 

and the size of the OTC Derivatives market within the

Kingdom is nominal at 0.03% of the global outstanding 

Notional values of OTC Derivatives Contracts. A selfassessment survey was completed and submitted to FSB 

in 2011. 

FSB principles for sound compensation practices and 

their implementation Standards have been fully 

implemented in Saudi banking system.

Given the minimum reliance on credit ratings in the first 

place, there are no new initiatives required to reduce 

reliance on External Credit Ratings. However, SAMA is 

encouraging Saudi Banks to move towards internal 

ratings based systems for credit risk and carryout more 

due diligence in trading and investment activities.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Support access to credit by the Small and 

Medium-Sized Enterprise (SME) sector. 

Ongoing process.

Increase economic integration within the 

GCC and deepen trade relations with 

The main objective is to 

further stimulate job 

creation for Saudi nationals 

in the private sector.

The main objective is to 

further stimulate economic 

While the process is ongoing, SAMA has taken several 

measures to encourage Saudi Banks to actively provide 

banking services to the SME sector. These include 

encouraging all banks to create SME Departments and 

collecting data for SME Program. Furthermore, 

government and commercial banks have contributed to 

the creation of an SME credit guarantee program called 

Kafala. Until recently, 3000 guarantees have been 

provided, which amount to SR 1.4 billion to finance 

projects. In addition, the ratio of guarantee has been 

increased recently to cover 80% of the total finance for 

the SME and the scope of coverage has been extended 

to cover any enterprise with sales up to SR 30 million. 

Also, another SME program has been launched through 

the Saudi Credit & Saving Bank, which has already 

extended loans of SR 4 billion. These measures are 

expected to contribute to the growth of SME program 

and stimulate job creation. 

Recently, the GCC summit announced the 

transformation of the GCC relation from cooperation to 
Table: Policy Commitments by G20 Members SAUDI ARABIA

42

emerging partners.

Improve incentives in the labor market.

Approve the draft mortgage law. 

activity.

The main objective is to 

further stimulate job 

creation for Saudi nationals 

in the private sector.

The new mortgage law will 

improve the housing finance 

framework and help meet 

the rising demand for 

housing.

union, which will include further and accelerated work in 

all aspects of economic integration within the GCC.

The recent initiatives, including Nitaqat, Hafiz, and 

Liqaat, are aimed at improving the incentives to hire 

more Saudi citizens in the private sector, providing 

unemployment benefits to persons who are actively 

searching for jobs, and matching jobs seekers with 

employers.

Banks are continuing to develop their residential real 

estate finance and mortgage portfolios to supplement 

funding allocated by the government to the housing 

sector. The draft mortgage law is expected to be 

approved in the near future.

Other commitments

Commitment/Timeframe Objectives Update on Progress

Continue to play its systemic role in 

stabilizing the global oil market. 

To support global economic 

growth and development

Saudi Arabia recently announced its readiness to 

mobilize more of its 2.5 million barrels per day of spare 

capacity in order to satisfy the oil market needs.
Table: Policy Commitments by G20 Members SOUTH AFRICA

43

SOUTH AFRICA

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Reduce fiscal deficit from 5.5% of GDP in 

2011-12 to 3.3% by 2014-15, in line with the 

economic recovery. Net debt stabilises at 

40% of GDP in 2015-16 if the recovery 

continues.

Timeframe: Fiscal deficit and net debt 

figures updated twice yearly at MTBPS 

(October) and Budget (February)

Close the current deficit by 2013-

14 in order to borrow only for 

capital expenditure.

Rebalance the composition of 

expenditure away from 

consumption and toward capital.

Actual fiscal deficit of 4.5% of GDP in 2011-12, 

now projected to decline to 3% in 2014-15 

(Budget 2012).

Net debt expected to stabilise at 38.5% of GDP 

in 2014-15.

Develop fiscal guidelines informed by 

counter-cyclicality, long-term debt 

sustainability, and intergenerational equity. 

Publish a long-term fiscal report in 2012.

Timeframe: Long term fiscal report to be 

published by the end of 2012

Make explicit the costs of existing 

and new programmes requiring 

long-term commitment.

Fiscal guidelines included in Budget 2011 and 

shaped fiscal decisions in Budget 2012.

Terms of reference developed for long term 

fiscal report.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Implement a “twin-peak” model of financial 

regulation with the central bank responsible 

for both macro and micro prudential 

regulation and the market conduct 

regulator for market conduct regulation. 

Process is coordinated by Financial 

Regulatory Reform Steering Committee 

(FRRSC). Implementation date depends on 

progress in various working groups. Aim is 

2013 for the overarching legislation. 

Implement Basel III, Solvency 2 and Treat 

Customer Fairly (TCF) for banks, insurers 

and financial service providers within 

committed timelines. Establish the central 

bank as the crisis resolution authority. 

Expand scope of regulation to include credit 

ratings agencies, OTC derivatives, and 

private pools of capital.

Timeframe: Drafting and tabling in 

Parliament of new Act in 2013, giving effect 

to twin peaks model of financial regulation 

and enhance crisis resolution framework. 

Amendments to the Banks Act and the 

Regulations relating to Banks by 2013, as 

required for the implementation of the Basel 

III framework. 

Enactment and implementation of the 

Financial Markets Bill and the Credit Ratings 

Services Bill in 2012.

Explicit focus on financial stability 

and systemic crisis resolution 

according to Financial Stability 

Board principles to reduce the 

cost of a financial crisis. 

Strengthen and improve coordination between prudential 

and market conduct regulators to 

improve efficiency. 

Establish an effective regulatory 

framework based on best 

international practices, which 

includes countercyclical 

characteristics reduce systemic 

risks and prevent a build-up of 

excessive asset price and credit 

bubbles, thereby contributing to 

more sustainable growth in the 

long term and more moderate 

short term growth cycles.

The FRRSC has prepared a detailed roadmap 

document. The first draft of legislation being 

prepared, to be tabled in

Parliament in 2013. 

Basel 2.5 regulations implemented in Jan. 

2012. Draft 1 of the revised bank regulations to 

implement Basel III was published at the end of 

March 2012 and comments are currently 

processed into Draft 2. Industry consultations 

and impact assessments are continuing. 

Training for Basel III has also started. 

Discussion papers, consultations and QIS 

exercises on implementing Solvency 2 and TCF 

are underway. 

The Credit Ratings Services Bill 2012 and the 

Financial Markets Bill 2012 have been tabled in 

Parliament. The Financial Markets Bill proposes 

requirements for central reporting, clearing 

and settlement of OTC derivatives.
Table: Policy Commitments by G20 Members SOUTH AFRICA

44

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Public sector investment on roads, rail, 

ports, electricity and water.

Budgeted public sector expenditure of R802 

billion up to 2014- 15 (7.3% of GDP per 

year).

Timeframe: 2012/13 to 2014/15

Public sector investment in 

network infrastructure to improve 

the economy’s underlying cost 

structure and competitiveness. 

Real public sector investment was 7.1% of GDP 

in 2011. 

Budgeted spend of R845 billion (7.6% of GDP) 

up to 2014/15.

Measure of Progress: Real public sector 

investment (Quarterly figures).

Annual figures on infrastructure investment by 

sector and state owned entities (Budget, 

February)

Increased focus on community work 

programme (CWP) in existing public works 

programmes (EPWP); co-financing for job 

creation initiatives. Budgeted expenditure 

on

EPWP of R73 billion over 3 years Jobs Fund 

launched in June 2011 with budget of R9 

billion over 3 years.

Timeframe: 2012/13 to 2014/15

Guaranteed work opportunities 

for the vulnerable and 

disadvantaged. 

The Jobs Fund targets sustainable 

job creation through four funding 

windows: work-seeker support, 

enterprise development, 

infrastructure and institutional 

capacity building.

R6.1 billion allocated to CWP over next three 

years to raise annual participant numbers to 

332 000 in 2014-15.

Jobs Fund committed R1.054 billion in 2011/12 

with R929million in matched funding.

Measure of Progress: Quarterly figures on 

work opportunities created through the CWP

Committed funds, matched funding, short term 

jobs and sustainable jobs for the Jobs Fund.

Health financing reform with ultimate aim 

of establishing some form of National 

Health Insurance (NHI) to improve quality 

and coverage of health service.

Timeframe: A White Paper and NHI 

legislation will be introduced within the next 

1-2 years. 

This is an on-going reform to be 

implemented in three phases over a 14-15 

year period.

Improve resourcing of public 

health services 

Establish some form of purchaser 

provider split; 

Introduce some contracting with 

private providers starting with 

general practitioners; 

Strengthen public health services;

Better performance on R10bn pa 

investment programme, 

Increase training of doctors;

Institutionalise and strengthen 

Office of Standards Compliance 

(OSC).

Green paper on NHI published 

NHI conditional grant established to support 

NHI pilot sites in ten selected districts from 

April 2012. Budget of R1.05bn over three years 

allocated for NHI pilot sites.

Set of reforms to be tested in each pilot district 

and mechanisms of monitoring and evaluation 

still to be finalised.

Measure of Progress: National Treasury to 

release a health financing and tax discussion 

paper in July 2012. 

New models of primary health care delivery 

tested in pilot sites including contracting with 

general practitioners; 

OSC established as a public entity and doing 

quality testing in public hospitals 

Establish an expanded Tripartite free trade 

area encompassing COMESA, EAC and SADC 

(26 countries).

Timeframe:To be completed in June 2013.

Promote market integration, 

infrastructure and industrial 

development in Africa.

On-going negotiations, expected to be 

completed in June 2013. Initial focus on trade 

in goods.

Negotiations on trade in services began in April 

2012.

Measure of Progress: Completion of specific 

rounds of negotiations
Table: Policy Commitments by G20 Members SPAIN

45

SPAIN

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Progressive deficit reduction towards 

budget equilibrium in 2016 Reversion 

of public debt growing trend in 2014,

Yearly deficit objectives 2012‐2015: 

‐5,3%, ‐3%, ‐ 2,2%, ‐1,1 

Approval of a law to develop and 

implement the principle of budgetary 

stability now enshrined in the 

Constitution after Constitutional 

reform

Approval of a public expenditure rule

limiting public expenditure growth 

rates to the medium term growth rate 

as a maximum

Reduction in health expenditure by 

1.333 M € in 2012 and 2.667M € in 

2013 

Reduction in education expenditure by 

3.600 M € in 2012 and 3600 M € in 

2013 

Improvement of transparency in the 

regions and local entities’ budgets.

2012 Budget approved including a reduction 

of ‐16,9% of Ministerial expenditures.

Revenues measures undertaken (including 

measures on Corporate tax, rises on taxes on 

tobacco and temporary increases in personal 

income tax and in tax on property)

The Budget Stability Law entered into force on 

May 1st; tighter control on regional 

governments has been incorporated into the 

main body of the Law. Now, the Government 

has up to three months to decide on 

methodological issues which will be very much 

along the line of the European rule.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

Strengthening of the financial 

regulatory framework

1. Transposition of EU regulatory 

rules: Process of transposition of listed 

companies Directive and amendment 

to the Securities Markets Law 

completed. UCITS Directive and 

Alternative Investment Fund Managers 

Directive in the process of 

transposition. New EU rules foreseen 

for Market Infrastructures, Capital 

Requirements Directive IV (Basel III 

implementation); Crisis Management, 

Markets in Financial Instruments 

Directive, Deposit Guarantee Schemes 

and the modification of Financial 

Conglomerates Directive and certain 

provisions of the Capital Requirements 

Directive and the Insurance Mediation 

Directive.

2. Follow up of the new regime of 

remuneration policies introduced in 

the Second and Third reform of the 

Capital Requirements Directive.

1‐Ongoing work at national level on 

transposition of UCITS (almost completed), 

Alternative Investment Fund Managers and 

Financial Conglomerates Directive. 

‐Ongoing work at EU level on Market 

Infrastructures, Capital Requirements Directive 

IV (Basel III implementation); Crisis

Management (Provisional version of 

Commission proposal published on June 6th ), 

Markets in Financial Instruments Directive, 

Deposit Guarantee Schemes.

2. ‐ Follow up of the new CRD regime: 

Completed. New provisions on remunerations 

policies on entities with public support have 

been included in RDL 2/2012. 

Regulatory development of RDL 2/2012 on 

remuneration policies to be approved shortly.

Completing banking sector 

strengthening and

restructuring measures: consolidation, 

restructuring and recapitalisation

1. Consolidation and restructuring of 

Spanish savings banks: a) 

Consolidation b) Completing 

restructuring plans for entities which 

have received public support (cost 

cutting programs, balance sheet repair, 

disinvestments plans approved by the 

1. a) Consolidation: Ongoing (savings banks 

already reduced to 9). All but 2 savings banks 

have transferred their operational activities to 

a bank. It can continue further given the 

additional provisioning requirements imposed 

by RDL 2/2012 and RDL 18/2012 that can be 

complied with integration procedures.
Table: Policy Commitments by G20 Members SPAIN

46

Bank of Spain); c) adjustment to new 

corporate structures (savings banks 

transferring business to banks) and 

new governance rules.

2. Increase banks’ capital ratios in 

accordance to new solvency 

requirements (RDL 2/2011). Priority 

given to private capital sources. Fund 

for Orderly Bank Restructuring 

available if public money is required, 

under strict conditionality.

b) Restructuring plans: In place. Close 

implementation monitoring of the new 

provisions and capital requirements Decree 

Law (RDL 2/2012).

c) Governance rules: In force. Implementation 

ongoing. The RDL 2/2011 introduces important 

rules on corporate governance. The RDL 

2/2012 has also made further progress on 

simplifying saving banks’ structure.

2‐ RDL 2/2011: In force. 5 Spanish banks 

subject to EBA’s recapitalization exercise. 

Recapitalization plans presented in time. Now 

under implementation.

Continue reinforcing the overall 

confidence in

banks, clean up of balance sheets and 

state

capital support where necessary

1. Close implementation and 

monitoring of the reform (RDL 2/2012) 

whose objective is balance sheet 

cleanup and the subsequent 

restructuring process which is currently 

in place.

2. Government guarantees to bank 

issuances (Orden ECC/149/2012): up to 

EUR 100 billion to be granted during 

2012 to guarantee bank issuances with 

a maturity between 1 and 5 years. The 

scheme was approved by the EC for 

the first half of 2012.

3. Close implementation and 

monitoring of the RD 18/2012, whose

objective is further balance sheet clean 

up of RE performing loans and putting 

aside problem assets from bank’s 

balance sheets.

1. RD Law 2/2012 31st of March of 2012: each 

entity presented a plan to comply with the 

measures (including or not an integration 

process) and BdE has approved some of them 

under certain conditions.

 If there is not integration process, the 

entity must comply by year‐end 2012.

 If, on the other hand, there is integration 

process, the entity must comply by 12 

months after the approval of the 

integration plan.

3. RD Law 18/2012. June 11th 2012: deadline 

to present the compliance plans for new 

provisions. the following 15 working days: 

assessment of plans by the Banco de España 

(BdE) → if the plans entail a shortfall of own 

funds or capital:

 BdE will require new measures to avoid 

shortfalls and an execution plan within the 

next five months

 If BdE considers compliance is unlikely → 

additional measures will be required, 

including financial support from the FROB.

For all institutions: independent AMC will be 

compulsory created by each institution to get 

rid of problem RE assets that will be sold at a 

reasonable value.

Transparency exercise: two private and 

independent evaluations of the 14 main 

Spanish banking groups, representing 90% of 

the financial system, are being performed. 

The Eurogroup has stated its willingness to 

provide a loan for financing for the 

recapitalisation of the weakest financial 

institutions.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Administrative reforms including:

‐Institutional reform of sector 

regulators towards a multisector 

‐ Increase efficiency in the allocation of 

public resources, reducing expenses 

and avoiding overlapping.

Public Sector Reorganization Plan and the 

review of public entities executive’s salary 

regime was approved in March 2012. Draft law 
Table: Policy Commitments by G20 Members SPAIN

47

regulator approach.

‐Public Sector Reorganization Plan, 

rationalizing the number of entities and 

their structure and executive pay.

‐Improve legal certainty and quality of 

supervision. 

‐ Removal of inappropriate 

competences in territorial 

administrations

‐ Rationalization of the number of local 

entities 

‐ Increase of the productivity of public 

employees, and reduction of 

absenteeism

‐ Improve the efficiency of the 

administration of justice

on transparency, public information and good 

governance 

Creation of the National Market and

Competition Authority: ongoing

Measures to remove restrictions to 

competition

in products and services markets and 

simplify procedures and regulatory 

frameworks.

‐Remove restrictions to retail 

distribution activities and increase 

opening hours.

‐Tackling barriers to competition and 

market segmentation associated to the 

regulated professions. Reinforce the 

principle of freedom of access and 

exercise in all professional activities

‐ Guarantee the unity of the national 

Internal Market 

‐ Correct the imbalances of the energy 

sector

‐ Improve the efficiency of the 

education system to generate a 

competitive human capital base

‐Reform on licence for retail sales 

approved on May 2012.

‐Reform on household rental framework, draft 

law approved, pending on parliamentary 

approval.

‐Reform of education: ongoing.

Encourage the activity of SMEs and 

entrepreneurs by improving the 

business environment and access to 

financing instruments

‐Create incentives for business creation 

and SME development and growth;

‐Reduce the number of procedures and 

time taken to set up a business.

Removal of licenses to open stores of less than 

300m2 for retail and other services innocuous 

activities

Approval and implementation of the 

labour market reform to address the 

main rigidities in the labour market.

To improve workers’ employability, to 

provide firms with more flexibility so 

that they can more easily adapt to the

economic cycle and to contribute to 

faster creation of more stable 

employment.

The labour market reform entered into force 

on February 12th 2012.
Table: Policy Commitments by G20 Members TURKEY

48

TURKEY

Fiscal Policy

Commitment/ Timeframe Objective Update on Progress

The Medium Term Program (MTP) for 

2012-2014 was announced on October 

13, 2011. According to the MTP:

- General government deficit to GDP 

ratio will gradually go down to 0.4% by 

end 2014 from 2.9% in 2010,

- EU-defined public debt to GDP ratio is 

projected to decline to 32% by end of 

2014 from 42.2% in 2010.

This program will ensure the 

continuation of improvement in fiscal 

balances as well as the downward 

trend in public sector indebtedness. 

This will also help to improve savinginvestment imbalances of the 

economy.

EU-defined public debt to GDP ratio declined 

to 39.4% in 2011, which was targeted at 

39.8% in MTP (2012-2014).

Monetary and Exchange Rate Policies

Commitment/ Timeframe Objective Update on Progress

Inflation targeting and flexible exchange 

rate regimes will continue to be the 

main pillars of monetary policy. 

Inflation target is set as 5 percent for 

2012, 2013 and 2014.

Achieving price stability, while 

safeguarding financial stability. 

The target variable is the year-end inflation 

rate, which is calculated as the 12-month 

change of the Consumer Price Index (CPI). 

The Monetary Policy Committee forecasts 

the year-end inflation to be at 6.5 percent in 

2012 and converge to the target by mid2013. 

Cumulative increases in the exchange rate 

and commodity prices coupled with 

adjustments in administered prices pushed 

inflation higher in 2011. The tight monetary 

policy stance pursued by the CBRT since 

October 2011 will facilitate a sharp decline in 

inflation particularly in the last quarter of 

2012.

Financial Sector Policy

Commitment/ Timeframe Objective Update on Progress

Compliance with EU regulations and 

international standards in financial 

sector regulation and supervision will be 

improved. (2012-2014)

This commitment will help to achieve 

strong and sustainable growth 

supported by a more resilient financial 

system.

BRSA has already prepared Basel II draft 

regulations by taking into consideration the 

provisions of Capital Requirement Directive. 

The Basel 2.5 regulations are also prepared 

and the views of the related parties will be 

received shortly. 

The Draft Capital Market Law taking into 

account the EU regulations and international 

standards has been prepared. The CMB 

launched a public consultation on the new 

Draft Capital Market Law (March, 2012).

Basel II regulations will fully be 

implemented by June 30, 2012. During 

this period, banks are required to report 

their data according to current and 

future regulations and supervision 

process will take place. Transition to 

Basel III will be done in line with the G20 commitment.

This commitment will help continuous 

improvement of risk-based prudential 

regulation and supervision

Since July 2011 banks in Turkey have 

implemented Basel II regulation as a parallel 

run practice.
Table: Policy Commitments by G20 Members TURKEY

49

Structural Reforms

Commitment/ Timeframe Objective Update on Progress

Enhance labor market flexibility and 

participation rates, and implement 

Active Labor Market Policies (2012-2014)

- Increasing non-agricultural 

employment by 1,5 million people 

during the program period.

- Reducing unemployment rate to 9.9 

by end 2014 from 11,9% in 2010. 

Non-agricultural employment increased by 

1,056 thousand people in 2010-2011 period 

and non-agricultural unemployment rate 

decreased from 14.8% in 2010 to 12.4% in 

2011. 

Unemployment rate realized as 9.8% in 2011. 

On the other hand, an important increase has 

been achieved in the participation to the 

active labour market programs. 

National Employment Strategy, which has 

been prepared to address structural 

problems in the labour market, will be 

published.

Education Reform

Provide equal opportunity in education 

and improve technology in our schools 

with the efficient use of Information and 

Communication Technologies (ICT) tools. 

We will provide tablets to all students 

and in all 40.000 schools will be 

equipped with LCD Smart Boards (FATIH 

Project) (2013). 

According to reform bill, currently 8 

years of compulsory primary education 

will be lengthened by four years to 12 

with the inclusion of high school 

education.

With this project, ICT will be one of the 

main instruments of the education 

process and it will also help teachers 

and students use these technologies 

effectively.

The education reform bill was enacted by the 

Parliament (March 30, 2012).

As of February 2012; 51 schools in 17 cities 

with an enrollment of 10,000 students are 

benefiting from this facility under the pilot 

implementation phase. 

Investment Environment Reform 

Program (2012-2014)

Improving the investment and business 

environment will eventually enhance 

competitiveness 

Structure of the Coordination Committee for 

the Improvement of the Investment 

Environment has been renewed as of January 

16, 2012, in order to increase its efficiency. 

Draft law regarding the promotion of 

business angel investments has been 

prepared. 

A new investment incentive regime was 

announced. 

Support the investments in the high 

external deficit sectors as well as to 

support the reduction of regional 

development differences.

Implementation details are to be announced.

A new incentive mechanism for private 

pension system was announced. 

The new incentive mechanism will 

replace the current tax deduction for 

pension contributions with a matching 

direct state contribution equivalent to 

25% of individuals’ contribution to the 

system. 

The new incentive mechanism will be 

more attractive especially for the 

citizens who are not income tax payers 

thus do not benefit from the current 

system.

Survey results and international 

experience show that new incentive 

mechanism will significantly increase 

the number of participants and boost 

the household savings ratio, which 

eventually help bring the current 

account deficit down and contribute to 
Table: Policy Commitments by G20 Members TURKEY

50

the strong, sustainable and balanced 

growth.

Industrial Strategy for Mid- and Hightech Goods, National Recycling Strategy, 

Input Supply Strategy, and 

Diversification of Export Markets 

Strategy (2012-2014)

Increasing competitiveness, securing 

sustainability and reducing dependency 

of production on imports of 

intermediate goods.

We evaluate and monitor the progress of the 

Turkish Industrial Strategy every six months. 

According to the 2011 results, considerable 

progress in our Industrial Strategy is made 

(that is 85% of the actions are completed in a 

successful way and 11 % of the actions are 

implemented partially).

“The Input Supply Strategy” and the 

respective Action Plan will be completed and 

put in place in 2012. 

Energy Sector Reforms (2012-2014) Improving current account balance 

through greater use of renewable and 

domestic energy resources and 

increasing energy efficiency.

The Energy Efficiency Strategy was approved 

by the High Planning Council on February 20, 

2012. The strategy aims to reduce Turkey’s 

energy intensity by at least 20 percent by 

2023 in comparison to its level in 2011.

The Strategy and Action Plan for Istanbul 

Finance Center Project (2012-2014)

This initiative will contribute to making 

Istanbul one of the most important 

financial centers.

As of December 2011, 12 of 71 actions 

included in the Strategy and Action Plan have 

been finalized and important progress has 

been made in the realization of 24 actions.

The Strategy to fight against informal 

economy (2012-2013)

The strategy will help to level the 

playing field for all enterprises and 

increase productivity. This will improve 

current account balance.

Our main targets are: i) increasing 

voluntary compliance, ii) improving 

audit capacity, iii) increasing 

deterrence of the sanctions, iv) sharing 

databases of different public 

institutions, and v) increasing public 

awareness 

We published our Strategy on December 21, 

2011. With this strategy we have 47 actions 

under five main targets. 
Table: Policy Commitments by G20 Members UNITED KINGDOM

51

UNITED KINGDOM

Fiscal Policy

Commitment/Timeframe/Measure Objectives Update on Progress

The UK will continue to implement its planned 

reductions in public spending as set out in 

Spending Review 2010. At Autumn Statement 

2011, the UK set plans for the spending 

restraint under the 2010 Spending Review to 

continue for a further two years in 2015-16 and 

2016-17.

To deliver fiscal consolidation that targets 

achieving cyclically adjusted current balance by 

the end of the rolling five-year forecast period 

and sets public sector net debt as a percentage 

of GDP on a falling path by 2015-16. 

To return the public finances to 

a sustainable position, support 

confidence, mitigate risks to the 

recovery and bring down debt 

and debt interest payments. 

By the end of 2011–12, almost 40 per cent of 

the annual fiscal consolidation planned for the 

Spending Review 2010 period will have been 

achieved.

The independent Office for Budget 

Responsibility forecasts that departments will 

exceed savings targets and deliver underspends of c. £6bn in 2011–12.

By the end of April 2012, the UK will have 

implemented measures to deliver almost 

three-quarters of the total savings expected 

from reforms to the welfare system.

The UK will continue to take action on longterm fiscal challenges, including through 

accelerating the rise in the State Pension Age 

(SPA) from 65 to 66 and through reforms to 

public sector pensions.

To underpin sustainable public 

finances and help restore 

private-sector confidence and 

underpin sustainable economic 

growth.

Pension contributions increased for most 

public servants from April 2012, with 

protection for the lower paid.

The UK has committed to bring forward the 

rise in SPA to 2020 from 2026. This will save c. 

£30bn between 2016-17 and 2025-26.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

The Bank of England Monetary Policy 

Committee will increase the size of its asset 

purchase programme, financed by the issuance 

of central bank reserves, by tranches of £75 

billion and £50billion to a total of £325 billion.

To achieve the Bank of 

England’s price stability 

objective, defined by the 

Government’s 2% target for 

annual CPI inflation.

The announced programme of asset 

purchases was completed in May. CPI inflation 

fell back to 3.0% in April. The Monetary Policy 

Committee’s latest assessment is that CPI 

inflation will decline to 2% by early 2013.

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

The UK will introduce legislation to reform the 

regulatory system for financial services, 

including establishing regulatory bodies with 

focused objectives and clear responsibilities; 

and delivering macro-prudential regulation 

through a Financial Policy Committee (FPC) of 

the Bank of England. 

To protect and enhance the 

resilience of the UK financial 

system.

To ensure the financial sector 

has the capacity to contribute 

to the growth of the UK 

economy in the medium or long 

term.

The Financial Services Bill is currently 

undergoing Parliamentary scrutiny in the 

House of Commons.

New regulators, including the FPC, will be 

established following the Bill’s passage 

through Parliament. 

The interim FPC has made recommendations 

and published two Financial Stability Reports. 

The Committee has also recommended 

macro-prudential tools for the Statutory FPC’s 

toolkit.

The UK has committed in principle to 

implement the recommendations set out in the 

report of the Independent Commission on 

Banking (ICB).

To improve financial stability by 

making banks better able to 

absorb losses, make it easier 

and less costly to sort out banks 

that get into trouble, and to 

curb incentives for excessive 

risk-taking. 

The Government will publish a White Paper 

on the recommendations of the ICB on 14th

June. This will have a legislated timetable 

alongside. Legislation related to the ring-fence 

will be completed by May 2015 and banks will 

be expected to be compliant as soon as 

practically possible thereafter.
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The UK will put in place a package of credit 

easing schemes for small businesses. The 

scheme runs for 2 years and will end March 

2014.

To address the issue of viable 

small businesses facing higher 

costs of finance, as bank 

funding remains constrained.

On 20th March 2012 the Government 

launched the National Loan Guarantee 

Scheme, allowing small businesses to borrow 

at a cheaper rate. Almost £5 billion of the £20 

billion scheme to participating banks have 

been allocated so far.

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

The UK is implementing a wide range of 

structural reforms. In particular, the 

Government will reform national planning 

policy to ensure land is released where houses 

are needed and is providing strong new

financial incentives for local councils to 

promote house building.

The Plan for Growth, Autumn Statement 2011 

and the National Infrastructure Plan 2011 

(published alongside the Autumn Statement in 

November) announced a wide-ranging 

programme of over 250 economic reforms and 

investments in infrastructure to help build a 

stronger and more balanced economy in the 

medium term.

To put the UK on a path to 

sustainable, long-term 

economic growth.

The Government has published the National 

Policy Planning Framework (NPPF). The NPPF 

will refocus planning to better support 

growth, including a powerful presumption in 

favour of sustainable development. 

Work is well underway on all commitments, 

and as part of Budget 2012, the Government 

published an update of progress on all 

measures announced through the Growth 

Review so far. Updates on infrastructure 

measures announced in the National 

Infrastructure Plan and Autumn Statement 

2011 were published alongside Budget 2012 

in an Infrastructure Delivery Update.

The UK is taking action to improve public sector 

efficiency, including reduced budgets for 

spending on administration within central 

government by at least 33%. 

To put the UK on a path to 

sustainable, long-term 

economic growth.

The Government has created the Efficiency 

and Reform Group to support efficiency 

savings, including through reducing nonessential discretionary spend and smarter 

procurement.

The UK is committed to implementing far 

reaching reforms to the benefits system 

including: 

- Universal Credit is a fundamental 

reform replacing the majority of 

working age means tested benefits and 

tax credits from 2013/14. It will 

simplify the existing benefit system 

and improve incentives to work. 

- From 2013, Disability Living Allowance 

will be replaced with a new benefit, 

Personal Independence Payment. 

Entitlement to Personal Independence 

Payment will depend upon the 

outcomes of a new fairer, more 

accurate and objective assessment. 

The reform will save £1.5bn p.a. by 

2016-17.

Total benefit payments will be capped at 

around the median income for working families 

from 2013/14 onwards.

The Government’s vision for 

the tax, benefit and pensions 

system is that it should be fair, 

simple and reward work. 

From April 2012, contributory Employment 

and Support Allowance (ESA) claimants in the 

Work Related Activity Group have their 

entitlement time-limited to one year. Since 

April 2011 Incapacity Benefit claimants are 

being reassessed for ESA. 

The Government has announced its intention 

to remove funding for Remploy (sheltered 

employment for disabled people). Funding will 

be redirected to more efficient programmes 

such as Access to Work.

The Government has introduced a package of 

housing benefit reforms which will reduce 

spending by £1.8bn by 2014-15. 
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The UK will continue to implement a wide range 

of reforms announced in 2010 to improve the 

UK schools system –including an increase to the 

autonomy of a large number of schools (known 

as “Academies”), introduction of the Pupil 

Premium to narrow the attainment gap 

between rich and poor pupils, and increasing 

the accountability of the schools through 

greater transparency of performance and 

expenditure.

To raise educational outcomes 

for all pupils, and to ensure that 

children have equal access to 

educational opportunities 

regardless of their parents’ 

income.

1,776 UK schools are now Academies –

compared to 203 in July 2010.

The Government has introduced the Pupil 

Premium – extra funding per deprived child 

(£600 per child in 2012/13). 
Table: Policy Commitments by G20 Members UNITED STATES

54

UNITED STATES

Fiscal Policy

Commitment/Timeframe Objectives Update on Progress

Identify between $1.2 and $1.5 trillion in 

additional federal deficit reduction over the 

period FY2013-22 to go along with the $900 

billion in agreed spending reductions included in 

the Budget Control Act of August 2, 2011.

Work to prevent a disruptive fiscal deficit 

reduction in 2013 that could harm the economic 

recovery. 

To help put the federal 

budget on a more 

sustainable path, 

increase national saving, 

and contribute to a more 

balanced pattern of U.S. 

economic growth.

To prevent a sharp drop 

or even contraction in 

the pace of economic 

growth.

In November 2011, an additional $1.2 trillion in 

federal deficit reduction over the period FY2013-22 

was required as part of the Budget Control Act, to 

be applied through an automatic spending 

sequester scheduled to take effect in January 2013. 

The President’s FY2013 Budget proposes further 

deficit reduction measures (including a more 

balanced mix of spending cuts than would occur 

under sequester) that would bring total deficit 

reduction over the next 10 years to more than $4 

trillion. These cuts would stabilize the debt-to-GDP 

ratio by 2015 and reduce the deficit to less than 3% 

of GDP by FY2017.

Progress concerning deficit reduction is to be 

assessed with respect to the U.S. federal budget, 

measured against a baseline that continues current 

tax and budget policies over the period FY2013-22. 

The debt-to-GDP ratio is to be measured using as 

the numerator federal debt held by the public.

Measured against estimates that if current law 

prevails, the budget deficit could contract by 4 

percentage points of GDP or more in 2013.

Monetary and Exchange Rate Policy

Commitment/Timeframe Objectives Update on Progress

Financial Sector Policy

Commitment/Timeframe Objectives Update on Progress

(1) Support recovery of the housing market by 

removing barriers to refinancing mortgages and 

helping “underwater” borrowers delever – 3 to 

12 months.

(2) Develop alternative strategies for the 

disposition of distressed assets of the Federal 

Housing Authority (FHA) and GSEs – 3 to 12 

months.

Increase the number of 

borrowers eligible to 

refinance housing loans 

into lower interest rates; 

and reduce the strain of 

negative home equity on 

households and local 

economies.

Ease pressure on the 

housing supply 

overhang.

Announced changes to HARP program in fall 2011 

that reduced barriers to refinancing for borrowers 

with GSE-guaranteed loans and little to no equity in 

their homes. Working to enact legislative proposal 

to further improve and expand that program, 

including incentives for underwater borrowers to 

take shorter-term loans to speed up the rate at 

which they pay down principal. Increased 

incentives for lenders to write down principal 

through Treasury loan medication program (HAMP) 

and made these incentives available to GSEs (an 

offer still under consideration by their conservator).

Treasury and the Federal Housing Finance Agency 

(FHFA) announced a pilot program in which 

regionally targeted GSE REO inventory will be sold in 

bulk.

FHA announced that it will begin an expanded NPL 

note sale program in which they will sell notes in 
Table: Policy Commitments by G20 Members UNITED STATES

55

(3) Further reform housing finance and servicing 

markets over 2012-14 timeframe by: increasing 

loan guarantee fees for GSEs; increasing the 

amount of risk-absorbing private capital; winding 

down GSE investment portfolios; and 

establishing national mortgage servicing 

standards.

(4) Reduce risk in the financial system through 

improved practices and enhanced oversight of 

the short-term financing markets

Sharply reduce tri-party 

repo market reliance on 

intraday credit from 

current level of about 

$1.6 trillion. 

Additionally, improve 

market participants’ 

risks management and

increase the availability 

of public data on 

outstanding risk.

bulk to investors willing to provide greater 

alternatives to foreclosure for borrowers struggling 

with default.

Legislation passed by Congress in December 2011 

required that Fannie Mae and Freddie Mac increase 

their 2012 guarantee fees by an average of 10 basis 

points. FHFA has announced that increases would 

begin April 1, 2012.

FHFA also announced that increased up front and 

annual insurance premiums will be fully 

implemented by June 2012. Up front premiums will 

increase by 75 basis points and annual premiums 

will increase 10 basis points for conforming loans 

and 35 basis points for jumbo loans.

A mortgage servicing settlement between the 

Justice Department, HUD, and 49 state attorneys 

general and the five largest servicers was filed in 

March 2012. The consent judgments provide the 

details of the servicers’ financial obligations under 

the agreement, which include payments to 

foreclosed borrowers and more than $20 billion in 

consumer relief; new standards the servicers will be 

required to implement regarding mortgage loan 

servicing and foreclosure practices; and the 

oversight and enforcement authorities of the 

independent settlement monitor.

Daily unwind moved from early morning to 3:30 

PM; automated collateral substitution capabilities 

introduced; 3-way trade confirmations for all TPR 

transactions implemented; final progress report of 

Industry Task Force issued; and market size, 

collateral composition, and margining statistics 

reported monthly. Despite these accomplishments, 

the amount of intraday credit provided by clearing 

banks has not been meaningfully reduced. The 

FRBNY is intensifying direct oversight of market 

participants’ reform efforts including infrastructure 

changes and exploring additional changes to reduce 

risks.

To be assessed by the incremental reduction of 

intra-day credit extensions. Freeform efforts are a 

multiyear initiative requiring technology and 

business process changes. 

Structural Reforms

Commitment/Timeframe Objectives Update on Progress

Require employers that do not provide 

workplace pensions to establish automatic 

enrolment of employees in direct deposit 

Individual Retirement Accounts (IRAs).

Boost private saving and 

help rebalance the U.S. 

economy.

Commitment is included in the President’s FY2013 

budget proposal; awaiting Congressional action. 

Progress is to be measured with respect to whether 

the proposed legislation is passed by Congress and 
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56

Work to implement investments that connect 

American workers with job openings and skill 

building opportunities, including through 

partnerships between community colleges and 

businesses, and investments to support summer 

and year-round jobs for low-income youth; and 

connect the long-term unemployed and lowincome adults to work-based training 

opportunities.

Improve labor skills and 

reduce unemployment.

signed into law in CY2012.

Progress is to be measured with respect to whether 

the President’s legislative proposals (e.g., the 

Community College to Career Fund and the 

Pathways Back to Work Fund) are passed by 

Congress and signed into law in CY 2012.