Recovery timing 'depends on G20'

Prime Minister Gordon Brown has steered clear of echoing the chairman of the US central bank's prediction that the economic recovery will begin next year.

Instead he said the "speed at which we recover" will depend on what deals can be reached at the G20 and G8 summits.

He said, after talks with EC President Jose Manuel Barroso, that protectionism must be tackled "head-on" by leaders.

The two agreed "fundamental reform" of financial regulation was needed to avoid a repeat of the crisis, he said.

The head of the US Federal Reserve, Ben Bernanke, told CBS 60 minutes TV programme on Sunday that he expects America's recession to end this year.

"We'll see recovery beginning next year," Mr Bernanke said, but added recovery could be put in jeopardy if "we don't have the political will".

In a joint press conference in Downing Street, Mr Brown and Mr Barroso both stressed the need for international commitment to overcome the economic downturn.

Mr Brown repeated his calls for countries to work together in response to global recession, saying trade would help "the poorest and most vulnerable".

Mr Brown's comments come after a meeting of European finance ministers in Horsham, West Sussex, at the weekend, and ahead of the summit of leaders of the G20 group of rich and emerging nations, which is taking place in London on 2 April.

'Help the poorest'

At the Downing Street press conference he said: "We are seeing a large fall in world trade. The 1930s brought protectionism in response to recession; in 2009 we must tackle protectionism head-on."

The world should move from "from beggar-thy-neighbour policies to support-thy-neighbour policies," he added.

The prime minister said any economic stimulus package must "help the poorest, who are in the end the most hard hit by the global recession".

He added: "The G20 must have a focus on the poorest and most vulnerable... we need fundamental reform of the international regulatory system."

Mr Brown said: "I think the whole world should be committed to the sustained effort that is needed to sustain growth."

Asked directly about Mr Bernanke's comments Mr Brown said: "I've always said that the speed at which we'll recover will depend on the international cooperation we can achieve.

"And a lot therefore depends on what we can achieve at the G20 and the G8 and in discussions at other meetings.

"So we are putting in place the measures that are necessary for the reforms and the recovery that is to take place and I believe that people will look back on these measures and see that they were the biggest stimulus that has ever been provided to the world economy."

'Get out of mess'

Mr Barroso said he thought the G20 could lead to agreement which could mean "we can get out of this recession earlier".

He said: "This is the first crisis of the age of globalisation where we are seeing, for instance, countries that export more are being affected by a sharp drop in demand.

"But that's why I really believe the G20 summit in London can make a difference. Because if we restore confidence, if you are able to restore confidence, if you are able to send to the rest of the world a clear message that the leaders of these countries are now acting together and addressing collectively in a co-ordinated manner these problems, I think we can get out of this recession earlier."

Mr Barroso, who was also endorsed by Mr Brown for a further term as EC president, said: "This crisis is affecting every European household. We have to implement a plan to get out of this mess. People need to feel confident that recovery will come.

"They need to know that we can act, we will act and we will act together. I firmly believe there is a way out of this crisis."

He said there was a consensus that reform of the financial system was needed and added: "Money does not grow on trees. Profits cannot be private while debts are public. We need to put ethics back into the financial system."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/uk_news/politics/7945646.stm

Published: 2009/03/16 11:55:05 GMT