RESOLUTION 377 on MOVING BEYOND THE GLOBAL ECONOMIC CRISIS

The Assembly,

1.  Recognising that the recent global economic crisis has posed perhaps the greatest political and intellectual challenge Western societies have confronted since World War II;

2.  Admitting that this crisis reflects serious gaps in Western financial market regulation such as deficient international co-ordination in rule making, under-regulated financial markets, inadequate ratings processes and harmful remuneration policies in leading financial institutions, which, at times, behaved more as mutual enrichment societies than as efficient allocators of capital;

3.  Noting that this crisis also mirrors larger historical changes in the global order including the growing pluralism of the international system and the need to manage global matters in a more multilateral fashion;

4.  Recognising that the crisis has eroded the fiscal foundations of many NATO member countries, especially but not only in Central and Eastern Europe, and that national defence establishments are likely to confront daunting resource constraints in the near and medium term;

5.  Acknowledging that the monetary and fiscal policies of certain member states created the excess liquidity that financed perilous asset bubbles in the United States and elsewhere;

6.  Applauding the rapid emergency responses Western governments undertook to stave off depression, including efforts to clean up banking balance sheets, to maintain liquidity in the global economy and to undertake monetary and fiscal measures to prop up demand;

7.  Acknowledging persistent fragility in the international economic order such as: structural dependencies on the American consumer as the central global engine of growth, precipitously mounting fiscal deficits, and the presence of illiquid assets on banking balance sheets and regulatory lacunae;

8.  Recognising that this crisis has hit the developing world particularly hard by lowering its access to credit, trade opportunities and aid, and recognising also that this crisis followed on the heels of a significant surge in energy and food prices that also had a disproportionately adverse impact on poor countries;

9.  Welcoming the designation of the G20 rather than the G7 as the primary agent for coordination among the world’s most important economies;

10.  Accepting that the proper functioning of markets requires adequate government regulation and supervision;

11.  Opposing any resort to protectionist measures which might complicate the recovery;

12.  Lamenting the terrible toll that this crisis has taken on workers, who have lost their jobs and who face daunting challenges in finding new work because employment markets are invariably the last to recover in a severe financial crisis;

13.  Warning that this recession imperils global security and that the risk is greatest in the poorer countries where millions live in poverty;

14.  Noting that there are signs of a fragile economic recovery that now must be nourished;

15.  URGES member governments and parliaments of the North Atlantic Alliance:

a.  to maintain ample liquidity in the economic system at this fragile moment of transition between crisis and growth;

b.  to develop exit strategies for winding down stimulus programmes once recovery has firmly taken root and to adopt medium-term measures to restore budgetary health;

c.  to bolster savings in periods of growth in order to mitigate the risk of boom and bust cycles and to generate savings for future economic downturns;

d.  to construct strategies for keeping workers gainfully employed, and, failing that, to ensure that they are trained for new jobs and maintained above the poverty line so as not to permanently undermine their employment  prospects;

e.  to redouble efforts to co-ordinate economic strategy internationally, to engage the developing world in this process and to ensure that recovery strategies are environmentally sustainable;

f.  to resist the siren call of protectionism as free trade offers a tried and tested means of generating growth and prosperity;

g.  to overcome those hurdles blocking a successful conclusion of the Doha Trade Round;

h.  to co-ordinate banking reform initiatives thereby ensuring that “beggar thy neighbour” approaches to regulation do not trigger a race to the bottom that will leave the international economy vulnerable to future crises;

i.  to ensure that national security budgets are not overly compromised in this recession and to recognise that deeper procurement co-operation will generate savings without sacrificing capabilities;

j.  to defend international aid budgets targeted at dealing with this crisis particularly for fragile states;

k.  to recognise that the underlying conditions that caused the ongoing food crisis have not significantly changed and that policies are needed to ensure that food is available to the hundreds of millions living on the edge of starvation;

16.  CALLS ON the NATO Secretariat to present an annual report to the NATO Parliamentary Assembly’s Economics and Security Committee that details:

a.  the current and projected future defence expenditure of each member state; and

b.  the financial and human resources committed to NATO operations by each member state.