G-20 Agrees on Huge Stimulus, Tough Regulations to End Economic Crisis
By Sonja Pace
London
02 April 2009
Leaders of the world's 20 major developed and emerging economies have agreed on huge spending measures to boost world economies and implement tougher financial regulations to try avoid such crises in future.
Coming out of their full day meeting in London, G-20 leaders spoke of success, unprecedented consensus and historic compromises.
They pledged $1 trillion for the International Monetary Fund, the World Bank and other global institutions for individual countries to draw on to restore credit, economic growth and jobs.
"In an age when our economies are linked more closely than ever before, the whole world has been touched by this devastating downturn," said President Obama. "And today, the world's leaders have responded with an unprecedented set of comprehensive and coordinated actions."
President Obama said lessons of the past had been learned.
"Faced with similar global economic challenges in the past, the world was slow to act, and people paid an enormous price," said Mr. Obama. "That was true in the Great Depression [of the 1930s], when nations prolonged and worsened the crisis by turning inward, waiting for more than a decade to meet the challenge together."
Summit host, British Prime Minister Gordon Brown said the world had come together with a united plan to combat the global recession.
"We believe that in this new global age, our prosperity is indivisible," said Gordon Brown. "We believe that global problems require global solutions. We believe that growth to be sustained must be shared and that trade must once again become an engine of growth."
The summit's emphasis clearly was on coordinated action. G-20 leaders said they will maintain their current stimulus plans and expansionary policies as long as needed.
"Together, these actions give us confidence that the global economy can return to growth even faster than the International Monetary Fund is now predicting," Brown said.
There were vows against protectionism and for tougher measures to regulate banks, credit rating agencies and hedge funds, and a crackdown on tax havens.
"The banking secrecy of the past must come to an end," said Britain's prime minister.
The measures announced are wide ranging. But economic analysts say that what is just as crucial is that the leaders project a united front and a commitment to coordinate efforts to combat the crisis.
One after the other, the G-20 leaders seemed intent on doing just that. French President Nicolas Sarkozy said the summit exceeded his expectations and German Chancellor Angela Merkel spoke of a very good, almost historic compromise.
No one, it seemed, was going to bring up the differences within the G-20. The United States and Britain had wanted more government stimulus spending while Germany, France and most other European nations wanted tougher regulation of the financial sector. Some of the poorer nations wanted to ensure they were not forgotten and the bigger emerging economies, such as China and India, were intent on having a bigger say at the summit.
Throughout the meetings, a wide variety of protesters turned out to make their voices heard. On Wednesday, thousands of demonstrators took to the streets of central London - including anti-war, anti-poverty and anti-globalization groups as well as environmentalists and anarchists. While most of the marching resembled a giant street party, there were clashes with police and some arrests. On Thursday, the demonstrators who turned up around the ExCel Center, where the G-20 leaders met, were reported in the hundreds.
