G20 leaders hammer out massive plan to tackle financial crisis, revive economy

2009-04-02 23:28:42  

·The G20 leaders pledged to do "whatever necessary" to restore confidence, growth, and jobs. ·They agreed to promote global trade and investment and reject protectionism. ·They pledged to fund and reform international financial institutions.

    LONDON, April 2 (Xinhua) --

The second Group of 20 (G20) Summit concluded in London on Thursday with consensus on how to get the world out of the financial crisis, including pledge of 1.1 trillion U.S. dollars to revive the world economy, a joint call to fight protectionism, and concrete actions to tighten banking regulations.

    In a post-summit Leaders' Statement, the G20 leaders emphasized that "the only sure foundation for sustainable globalization and rising prosperity for all is an open world economy based on market principles, effective regulation, and strong global institutions."

    The G20 leaders pledged to do "whatever necessary" to restore confidence, growth, and jobs; repair the financial system to restore lending; strengthen financial regulation to rebuild trust; fund and reform international financial institutions; promote global trade and investment and reject protectionism, and build an inclusive, green and sustainable recovery.

    "By acting together to fulfill these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future," said the statement.

    For people around the globe, the new commitments by the world leaders are an important boost to restore confidence in their fight against the financial and economic crisis.

    HUGE FUNDS TO FINANCIAL INSTITUTIONS TO STIMULATE JOBS, GROWTH

    Among the additional funds to be injected into international financial institutions, 500 billion dollars will go to the International Monetary Fund (IMF) for it to lend to countries hit hard by the financial crisis, 250 billion dollars will be used to support a new Special Drawing Rights (SDR), 100 billion dollars will support additional lending by the multilateral development banks, and 250 billion dollars will be devoted to guarantee trade finance.

    Of the additional funding for the IMF, 40 billion dollars will come from China, 100 billion from the EU, and 100 billion from Japan, according to Brown.

    "Together with the measures we have taken nationally, this constitutes a global plan for recovery on an unprecedented scale," said the statement, adding that the G20 leaders are confident that the agreements reached Thursday will accelerate the return to trend growth.

    With the newly pledged funds, the G20 leaders agreed to make the possible best use of investment to achieve a goal of building a resilient, sustainable and green recovery.

    As Brown pointed out that trade is the "engine of growth," 250 billion dollars will be injected to stimulate trade to boost the economic recovery of countries hit by the crisis.

    However, the meeting failed to agree on any new stimulus measures, which the United States had been hoping for.

    Meanwhile, the G20 leaders spoke out their opposition to trade protectionism and determination to promote and facilitate global trade and investment, and remained committed to a quick conclusion of the Doha Round of world trade talks as soon as possible.

    "We reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports," said the Leaders' Statement.

    To ensure a "fair and sustainable recovery for all," the summit reaffirmed the commitment to meeting the UN Millennium Development Goals and to achieving ODA (official development assistance) pledges, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa.

    STRENGTHENED FINANCIAL SUPERVISION, REGULATION

    The G20 leaders agreed to take action to build a stronger, more globally consistent, supervisory and regulatory network for the future financial sector to rebuild trust in the financial system.

    They agreed to establish a new Financial Stability Board (FSB) with a strengthened mandate as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain and the European Commission. The FSB will collaborate with the IMF to provide an early warning of macroeconomic and financial risks and the actions needed to address them.

    The leaders agreed on extending regulation and oversight to all systematically important financial institutions, instruments and markets, including systematically important hedge funds for the first time.

    They reached consensus on taking action against non-cooperative jurisdictions including tax havens, and agreed to publish a list of tax havens. "The era of banking secrecy is over," said Brown.

    They also agreed on extending regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice, particularly to prevent unacceptable conflicts of interest.

    POSITIVE REATION FROM MAJOR COUNTRIES

    U.S. President Barack Obama called the London summit as "historical" and "a turning point" as "unprecedented and comprehensive" actions will be taken to revive the world economy.

    Speaking at a press conference after the summit, Obama highly praised results of the meeting. The G20 have made enormous strides to improving financial regulation, but needs to reform failed regulatory systems and must put an end to bubble and bust economy.

    French President Nicolas Sarkozy also expressed his satisfaction with the final results, while German Chancellor Angela Merkel called the results "a very good, almost historic compromise" that will give the world a clear financial markets architecture.

    Dutch Prime Minister Jan Peter Balkenende told BBC that said it has been "a remarkable meeting" and the results "are extremely important."

    South African President Kgalema Motlanthe, who country is the only representative in the G20, told reporters he was "quite pleased" with the meeting results, citing that the leaders had agreed to protect financing for developing countries and pledged to conclude talks on a new global trade deal.

    For people around the world, what is important next is to see how words turn into action.

    "These commitments made by G20 leaders must be translated into concrete action. With this unprecedented stimulus package I am quite confident that we will be able to overcome this economic crisis," said UN Secretary-General Ban Ki-moon after the meeting.

    According to Brown, the G20 leaders are scheduled to meet again before the end of this year to review progress on their commitments.

Editor: Mu

G20 leaders agree to fight protectionism

 2009-04-02 18:07:37  

    LONDON, April 2 (Xinhua) --

Leaders from the Group of 20 (G-20) have agreed to fight protectionism as they started their first plenary session after a working breakfast here on Thursday to search for a global solution to the global economic and financial crisis.

    In a brief opening statement, British Prime Minister Gordon Brown outlined a working plan for the discussion, calling on leaders to finalize the joint communique which covers banking regulations.

    Brown said the world leaders attending summit are anxious to reach agreements on major points, including a joint call to resist protectionism, and to strengthen financial regulation.

    On Wednesday, Brown said he was confident that the summit will produce consensus on a global plan for economic recovery and reform. "We are within a few hours, I think, of agreeing a global plan for economic recovery and reform and I think the significance of this is that we are looking at every aspect."

    The leaders are expected to have a busy day of intensive talks, which started with Brown hosting a working breakfast, followed by two plenary sessions. A joint communique will be issued at the end of the summit.

    The summit started by a breakfast scheduled at 8:30 am local time after the leaders were greeted by British Prime Brown at the entrance of London's exhibition censer, or ExCel London, in eastern London. The breakfast provided an opportunity for the leaders to exchange views in an informal way before their formal talks later in the day.

    Security is tight around the venue. Police can be seen at every crossroads within about five kilometers. Journalists have to pass through two security checkpoints to get to the press censer, where about 2200 registered journalists work and many of them stayed for the night.

    Outside the Excel, anti-capitalist protesters started their second day of protests. On Wednesday, at least 87 were arrested and one protester died, London's police said.

    Brown, the host, who made a global trip and met the leaders to prepare for the summit, said he was confident that the summit will produce consensus on a global plan for economic recovery and reform.

    European Commission President Jose Manuel Barroso expressed his belief Thursday that a consensus will be reached on the economic stimulus and regulation.

    "There is a real willingness to have convergence at the end of this summit and so I really believe that at the end we'll have a consensus around the two points that sometimes appear as differences: the stimulus of the economy and regulation," he told reporters.

    South African President Kgalema Motlanthe urged extra help for developing economies at the summit.

    "We are here to put across the position of the developing world, particularly with regards to the need to protect jobs because it's the impact on the real economy which affects ordinary working people ... if we're to find an everlasting solution we must develop a response that is inclusive of working people," he told BBC.

    Expectations are high that the leaders of the world's largest economies would be committed to a coordinated response to the economic crisis, an overhaul of the global financial architecture and restraint from protectionism.

    Attending the meeting are leaders from Australia, Brazil, Britain, Canada, China, France, Germany, Indonesia, Italy, Japan, the Netherlands, Russia, Saudi Arabia, Spain, South Africa, South Korea, Russia, Turkey, the United States and the European Union (EU).

    Top officials from the United Nations, the World Trade Organization, the World Bank, the International Monetary Fund(IMF), New Partnership for Africa's Development (NEPAD), and the Association of Southeast Asian Nations are also joining the gathering.

    The leaders will be aiming to enhance coordination of a global fiscal stimulus, reach a consensus on increasing loans to the IMF,and reaffirm commitment to anti-protectionism to help restore global sustainable economic growth and stabilize the financial market.

    But the outcome of the summit, however, rests with participants' ability to bridge their differences on economic stimulus plans and reforming the global financial system.

    While the White House has pushed for more fiscal measures to help the economy, major European countries, notably Germany and France, remain sceptical about this and they mainly focus on tightening financial regulation and reforming the world financial system to prevent such a crisis in future.

    French President Nicolas Sarkozy reportedly has threatened to walk out of the London summit if his demand for stronger financialregulation were not met.

    Speaking in an interview with French radio Europe 1 on Wednesday, Sarkozy reiterated that he wouldn't want to "associate" himself with a G20 that would be concluded by "false compromises."

    He said neither France nor Germany is satisfied with the current draft of the G20 statement, which he said should go even further on tightening financial regulations.

    "Regulation is at the heart of the debate," Sarkozy said.

    Major developing countries also support reforming the world financial system, but they insist that should have a bigger say in multilateral financial discussion and relevant policy-making process. The fact that the G20 has usurped the G8 as the main forum for discussing the crisis already illustrates a shift in the economic and diplomatic landscape with the emergence of India, Brazil and, particularly, China as major players.

    On Wednesday, leaders of major countries called for closer cooperation in dealing with the financial crisis.

    Chinese President Hu Jintao said at a meeting with his Russian counterpart Dmitry Medvedev Wednesday that China and Russia should strengthen cooperation to jointly overcome the current difficulties under the complicated and grave conditions of the world economy.

    The two countries need to strengthen communication and consultation, coordinate their stands within the G20 framework in particular, and push forward reforms of the international financial system, Hu said.

    U.S. and British leaders voiced optimism that the G20 summit will reach consensus on concerted efforts to deal with major issues.

    "I am absolutely confident that this meeting will reflect enormous consensus about the need to work in concert to deal with these problems," said U.S. President Barack Obama after talks with British Prime Minister Gordon Brown on Wednesday.

    German Chancellor Angela Merkel and French President Sarkozy Wednesday called for concrete actions at the Group of 20 (G20), warning that those who do not abide by the G20 commitments must be singled out.

    Speaking at a joint press conference following their meeting in London one day ahead of the summit, Sarkozy said bank loans need to be traceable, funds needs to be registered and checked, adding that the aim of agreeing on new regulations for the financial sector is "non-negotiable."

    The two leaders demanded that a new regulation of the international financial system be set up. "Without a new regulation, there will be no trust. And without trust, there will be no recovery. It is a major objective, non-negotiable," said Sarkozy.

    Merkel said that "more regulation is necessary" for the world to get out of the crisis.

Editor: Fang Yang