G20 leaders vow to restore growth

Finance ministers from the G20 group of rich and emerging nations have pledged to make a "sustained effort" to pull the world economy out of recession.

"We are committed to deliver the scale of sustained effort necessary to restore growth," they said in a joint statement after their talks in the UK.

UK Chancellor Alistair Darling said they agreed the International Monetary Fund should be given more money.

The talks were held amid reports of rifts over the best way forward.

BBC economics editor Stephanie Flanders said that the outline agreements represented "cheap talk", and differences on the way forward remain.

The outline agreements will now provide the basis for more concrete pledges at next month's meeting of G20 leaders in London.

'Decisive action'

Speaking after the gathering of finance ministers in Horsham, West Sussex, Mr Darling, said the G20 recognised the "sense of emergency" surrounding the world economy.

"We have taken decisive and comprehensive action to boost demand and jobs," he said.

“ Agreeing to an absolute standstill on all trade and capital barriers would have meant something ”
BBC economics editor Stephanie Flanders
"We are prepared to take whatever action is necessary."

The outline agreements released in the joint communique include:

Commitment to "fight all forms of protectionism and maintain open trade and investment"
A key commitment to restoring bank lending
Sustained stimulus packages to provide "vital support for growth and jobs". To be monitored by the IMF
Maintaining low interest rates
Commitment to helping developing nations
Increase in funding to the IMF
More regulation of credit rating agencies, the bodies that determine the worthiness or otherwise of financial investments
Our correspondent said the key two agreements were the pledge to increase the funds to the IMF, and the commitment to guard against protectionism.

"But talk is cheap," she said.

"Agreeing to an absolute standstill on all trade and capital barriers - so that countries could not raise tariffs or other constraints from their current levels, even where permitted under WTO [World Trade Organisation] rules - would have meant something."

'Consensus'

While the US and UK finance ministers have led the call for further public spending on stimulus packages to help lift economies, some of their European counterparts had earlier urged caution.

Led by Germany's Peer Steinbrück, they had said it would be best to see if the current stimulus schemes start to work before more money is dedicated.

Following the meeting, both Mr Darling and US Treasury Secretary Tim Geithner played down talk of any disagreement at the talks.

Mr Darling said there had been a "significant amount of progress, a great deal of consensus".

Mr Geithner added that "we have a very broad consensus globally on the need to act aggressively to restore growth to the global economy".

The G20 leaders will now meet in London in April.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7943794.stm

Published: 2009/03/14 16:54:59 GMT