UK-EU agreement on the Windsor Framework for Northern Ireland opens the door to enhanced cooperation between the UK and France on a range of shared challenges, including Russia’s war in Ukraine, the increase in cross-Channel asylum seekers, and combatting climate change. The UK and France should take this opportunity to show leadership in delivering the promise of the Bridgetown Initiative, which could deliver tens of billions in additional climate finance – and strengthen bilateral cooperation in other areas.
Rebooting UK-France relations
When UK Prime Minister Sunak and French President Macron meet in Paris on Friday 10th March, many weighty issues will be on the agenda: Russia’s war in Ukraine, international economic tensions, the ongoing global food crisis, and international migrant and refugee flows.
Building on the recent UK-EU agreement on the Windsor Framework, London and Paris now have the opportunity to work together to bridge the gaps in both finance and trust that are blocking faster climate action, particularly in developing countries. Bilateral cooperation on this agenda – which President Macron has championed alongside Barbados PM Mia Mottley – will support progress in restoring and deepening the UK-France partnership in other areas.
The role of the Bridgetown Initiative
The ‘Bridgetown Initiative’ developed by PM Mottley sets out to transform the international financial system to make it fit to address the climate crisis and global development challenges. Barbados initially put forward four proposals for reforms and innovations in the global financial architecture to enable climate-resilient investment at the scales needed. If successful, the reforms proposed in the Bridgetown Initiative would free up hundreds of billions of Euros. These can be used to tackle global public goods (GPGs) like climate change and global public health.
Both the UK and France have declared their support for the Initiative. President Macron’s ‘Summit for a New Global Finance Pact’ in June is an opportunity to lead a broad coalition co-defining the reforms and innovations needed to reboot the international financial system, so it can deliver the global transition to net zero.
The UK and France are two of the largest and most influential shareholders in the World Bank. They are entitled to some of the largest shares of IMF Special Drawing Rights (SDRs). And with their historical ties to the Commonwealth and Francophonie countries involved in the Initiative, the UK and France are ideally positioned to co-champion the Initiative in partnership with Barbados.
British and French backing for reform of the multilateral development banks’ Capital Adequacy Frameworks, the World Bank’s Evolution Roadmap, and the use of SDRs for the mitigation framework are essential for broadening political support. At the France-UK summit, the two countries could support an agenda for innovation and reform by:
Providing high-level political endorsement
- Reflecting joint endorsement of the Bridgetown Initiative in the summit communiqué can help get the issues atop the political agenda.
- PM Sunak could take a leading role at the New Global Finance Pact in Paris in June, in partnership with President Macron and PM Mottley.
- The UK and France could join forces to champion the inclusion of finance system innovations and reforms at the G7 Finance Ministers and Central Bank Governors meeting and Heads of State and Government meeting in May.
Pledging to collaborate on innovations
- The UK and France can collaborate with other High Ambition Coalition countries to develop proposals for innovative sources of finance for Loss and Damage – to feed into the Paris Summit and the COP28 processes.
- Together the UK and France can more effectively engage countries – in Europe and across the Global South – who have expressed reservations about financial architecture reform, by reflecting a shared ambition to co-design innovations and reforms with middle- and low-income developing countries.
- The reforms proposed in the Bridgetown Initiative have low political cost, minimal impact on fiscal space, and huge impact, delivering hundreds of billions of additional financing for climate and development.
- The reforms proposed by the G20 to reform the World Bank and regional MDB’s Capital Adequacy Frameworks were designed explicitly to retain the IFIs’ AAA credit rating.