Monday, March 16, 2009

G20 summit 'critical for economy'

The upcoming G20 meeting is critical if the world wishes to avoid the economic turbulence seen in the 1930s, the UK government has warned.

Cabinet minister Douglas Alexander said the summit in London of the G20 group of rich and emerging nations next month "was an important moment".

G20 finance ministers pledged to make a sustained effort to beat the recession after they met on Saturday.

But the talks took place amid differences on the best way forward.

The finance ministers also promised to continue with economic stimulus packages and low interest rates, and to increase IMF funding.

“ We do have a heavy responsibility to stop protectionism taking hold ”
Douglas Alexander
Mr Alexander played down suggestion of rifts between the EU and the US and the UK on how to tackle the financial crisis.

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 have urged caution.

"We had an agreement from everybody around the table to do all that that is necessary for as long as is necessary and that sends an important signal to markets," he told the BBC.

"There was a recognition with 20 countries around the room that the fiscal response is going to vary from country to country."

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

Heavy responsibility

Mr Alexander said that a failure at that summit would be very risky for the world economy.

"A meeting in London 1931, the world came together and failed to reach agreement on the way to deal with the recession at that time and we all know the consequences," he said.

"We do have a heavy responsibility to stop protectionism taking hold," he added.

President Barack Obama also denied suggestions of division between the US and some European countries.

He said he was fully committed to pursuing regulation of the global financial system.

"I don't know where this notion has emerged that somehow there are sides developing with respect to the G20," he said. "There are no sides."

Story from BBC NEWS:

Published: 2009/03/15 11:36:16 GMT

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