Germans expect climate change deal

GERMANY: Berlin officials are optimistic that a deal will be reached on greater aid for Africa and on climate change at the …

GERMANY: Berlin officials are optimistic that a deal will be reached on greater aid for Africa and on climate change at the G8 summit in Scotland.

Bernd Pfaffenbach, deputy economics minister and head of the Germany's G8 preparations, added yesterday that Berlin would be pushing for greater transparency in world oil markets to reduce price speculation. "We would be very much in favour of doubling aid by 2010 but discussions are still ongoing," said Mr Pfaffenbach.

Berlin is examining "innovative" sources of finance, including an air-travel surcharge, to help finance an increase in German aid from €1.8 billion to €2 billion in the next four years. Germany has also committed itself within the EU to increasing its development aid to 0.7 per cent of GDP by 2015. He admitted, however, that, apart from French support, the "critical mass" required to push through the air-travel surcharge proposal was still lacking.

A leading aid official in the chancellery rejected suggestions that it was premature to increase development spending before demanding greater democratic reform in several African countries. "We naturally demand that good governance is behind this [ aid]. We hope that through these promises of increased aid a certain dynamic will be created to get their houses in order," the official said.

READ MORE

Mr Pfaffenbach said reaching a worthwhile agreement on climate change would "not exactly be simple" in view of the US rejection of the Kyoto agreement, but he said the chancellor was hopeful a "kind of action plan with a reference to Kyoto" could be agreed. The US "recognises some good" in Kyoto, he said and "by not putting the Americans in the corner they could be aided to help contribute to goal-setting".

Mr Pfaffenbach also admitted there would no concrete agreement from the G8 on greater regulation of hedge funds, something announced earlier by Chancellor Schröder. Hedge funds have been a hot topic in Germany since leading government politicians attacked international investors as "locusts" who pick clean troubled German companies. Mr Pfaffenbach tried to moderate the tone yesterday, while making clear Berlin's desire for agreement on new rules.

"We don't think that hedge funds are something evil," he said. "The position of the chancellor will go in the direction that we also want more transparency here, It would be useful if we could harmonise the rules, especially on transparency. [ But] we're not thinking of any stricter instruments."