Thursday, April 2, 2009
G20 Pledges $1 Trillion in Funds
According to Al Jazeera...
World leaders at the G20 summit in London have announced they are to triple the finances of the International Monetary Fund (IMF) to help fight the worst economic crisis since the 1930s and will impose new curbs on financial markets.
In a closing speech at the meeting, Gordon Brown, Britain's prime minister, also pledged enhanced supervision for large hedge funds and a crackdown on tax havens.
"The old Washington consensus is over, today we have reached a new consensus that we will do what is necessary to restore growth and jobs and prevent a crisis such as this from happening again," Brown said.
"We have... agreed additional resources of $1 trillion that are available to the world economy to the IMF and other institutions."
Barack Obama, the US president, said that the G20 members had rejected the protectionism that could have deepened the economic crisis and that the summit had agreed "unprecedented steps to restore growth" and to prevent future crises.
Brown said the G20 would publish a list of tax havens that were non compliant with current regulations and would bring in "tough sanctions" for those who do not comply with any new changes.
"The banking secrecy of the past must come to an end," he said.
Nicolas Sarkozy, the French president, said that the conclusions of the summit were "more than we could have hoped for".
Angela Merkel, the German chancellor, called the agreement an "almost historic" compromise.
Shares in Europe and the United States rose following the announcement on hopes that the agreement would add to some signs that the downturn may begin to bottom out.
Samah El-Shahat, Al Jazeera's economic analyst, said: "To hear that the Washington consensus, which places all decisions in the hands of the market, is over is incredible.
"The Washington consensus has hurt so many people in developing countries. But what will replace it?"
G20 agreements, $1 trillion for international bodies, including $750bn for International Monetary Fund $250bn for trade finance Blacklisted tax havens will be named and shamed New rules on pay and bonuses for corporate bosses IMF to sell billions of dollars of gold reserves Urgent actions of Doha trade talks Another G20 summit to be held later this year. Brown said that the summit's final communique provided for a $500bn boost to the IMF's resources, raising to $750bn the funds it can make available to countries worst hit by the global crisis.
Mark Malloch-Brown, a UK minister, described the amounts as "pretty impressive figures".
The G20 also agreed a trade finance package worth $250bn to support global trade flows and agreed to kick start stalled Doha trade liberalisation talks at the next G8 meeting in Italy in July.
Brown had opened the summit, renewing calls for a common global strategy to fight the economic crisis.
The meetings, which were seen as make-or-break, were held behind closed doors and included leaders from the US, China, Russia, Britain and Saudi Arabia, among others.
There had been indications before the summit that G20 members were divided on how best to pull the global economy out of recession.
The US and Britain were in favour of pumping more money into the financial system, seeing the strategy as a way to encourage banks to lend to consumers and thus entice them to spend money on goods and services.
The US has so far spent, lent or guaranteed $12.8 trillion - almost as much as the value of everything produced in the country in 2008.
But France and Germany had signalled their opposition to further fiscal stimulus packages, calling instead for an emphasis to be placed on increasing regulation of the international financial system.
Protesters are holding demonstrations to coincide with the summit, a day after thousands of people filled central London to speak out against governments' management of the financial crisis.