BERLIN – The Group of 20's credibility is at risk because it has been primarily equipped to deal with crises and is less effective during normal times, European Central Bank board member Joerg Asmussen said on Friday.
Asmussen said that the group of industrialized and industrializing nations needed to be strengthened through reforms to make it more transparent, effective and binding in fighting crises.
"The G20's promising start has unfortunately been followed by more mixed results," Asmussen said in a speech.
"There is no viable or obvious alternative to the G20. .. The G20 should develop further into what it was meant to be from the outset: the premier forum for international economic cooperation."
The G20 has come under criticism for lacking bite and credibility, often not following through on its own agreements and commitments, such as on the Doha trade round.
Asmussen, who attended the first G20 meeting in Berlin in 1999, working for the German finance ministry at the time, said the forum had lost momentum in recent years, also "to an important extent due to a waning sense of urgency".
"Global economic governance as we know it today seems to be well equipped to manage a global crisis. But it is less effective during normal times, which also lessens its ability to prevent future crises," Asmussen said in a speech in Berlin.
"Global economic governance still falls short of meeting the scale of today's challenges."
To revive the G20's power, Asmussen said it needed to adopt a more transparent decision-making process and a more focused and concise operational agenda.
It also needed stronger international financial institutions and to engage with current non-members on an issue-by-issue basis rather than by expanding its membership overly, which could dilute its effectiveness.
(Reporting Annika Breidthardt, Editing by Jeremy Gaunt.)