Summit pledge to ‘restore growth’
Global leaders at the G20 financial summit in Washington have pledged to work together to restore global growth.
They said they were determined to work together to achieve “needed reforms” in the world’s financial systems.
Britain’s Prime Minister, Gordon Brown, said the agreements reached by leaders were “historic”.
US President George W Bush said that finance ministers would now work on detailed reform proposals, and then report back.
The meeting brought together leading industrial powers, such as the US, Japan and Germany, and also emerging market countries such as China, India, Argentina, Brazil and others – representing 85% of the world economy.
For the leading emerging economies, the significance of this G20 summit was clear – they now have to be taken into consideration in the mangement of the global economy.
Brazil’s President, Luiz Inacio Lula da Silva, said: “We are talking about the G20 because the G8 doesn’t have any more reason to exist.”
The next summit is likely to be in London
Key issues agreed by world leaders at this summit included:
- reform of international financial institutions such as the World Bank and the International Monetary Fund
- an agreement by the end of 2008, leading to a successful global free-trade deal
- improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions
- making sure banks and financial institutions’ incentives should “prevent excessive risk taking”
- asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system
- strengthening countries’ financial regulatory regimes
- taking a “fresh look” at rules that govern market manipulation and fraud.
In his address at the end of the summit, Mr Bush said there was no doubt that the financial crisis facing the United States and many other countries was a severe one.
He said it had even been conceivable that the US “could go into a depression greater than the Great Depression”.
“We are adapting our financial systems to the realities of the 21st century,” he said.
Speaking after the summit, the UK’s Mr Brown said the group had reached important conclusions “about trade, about financial stability and about the expansion of our economies”.
Russian President Dmitry Medvedev said the global financial structures created at the end of WWII were now inadequate.
“It will be necessary to rebuild the whole international financial architecture, make it open and fair, effective and legitimate”.
The stalled Doha round of global trade talks should be pushed forward so that a basic agreement can be reached before President Bush leaves office in January, said German Chancellor Angela Merkel.
“If there is the political will, it would be good if we could reach an agreement in the Doha round with the present US administration.”
In their joint closing statement, leaders said the reforms would only be successful, if they were “grounded in a commitment to free market principles”.
G20 leaders say they will meet again by 30 April, 2009, to review progress.
The next summit looks set to be held in London, with US President-elect Barack Obama attending.
Although no formal decision has been announced, France’s President, Nicholas Sarkozy, made it clear that he expects London to be chosen as the venue.
The G20 group of countries consists of 19 leading industrialised and developing countries, as well as the European Union.