G20 leaders agree to consolidate IMF

November 5th, 2011 - 2:17 am ICT by IANS  

Cannes, Nov 5 (IANS) The Group of Twenty (G20) leaders have agreed to strengthen the resources of the International Monetary Fund (IMF), French President Nicolas Sarkozy said Friday at the conclusion of the two-day summit that brought leaders of the world’s major developed and emerging economies at one platform.

Despite a Greek referendum drama which threatened to derail EU efforts to defuse a debt crisis, French President Nicolas Sarkozy tried hard during the summit to push previously designed G20 agenda, including global growth commitments, back on
track, Xinhua reported.

The leaders were expecting the IMF to play a key role in defending global stable growth, said Sarkozy during a press conference.

“We have made commitments to strengthen the IMF’s resources if necessary” and “have set up conditions” on this, Sarkozy said, emphasising that “the IMF must play its role as a defence of stability of growth.”

The leaders also agreed to increase the IMF resources to enable it to play a key role in defending growth and preparing for unexpected shocks, said Sarkozy.

G20 leaders also agreed to continue efforts “to further strengthen global financial safety nets and support the IMF in putting forward the new Precautionary and Liquidity Line (PLL)” to make sure financial safe net for countries in need.

“Today, we reaffirm our commitment to work together and we have taken decisions to reinvigorate economic growth, create jobs, ensure financial stability, promote social inclusion and make globalisation serve the needs of the people,” read the final
communique adopted by the leaders at the summit.

G20 countries have chosen different measures to tackle their respective priorities. Advanced countries with tight budget “commit to adopt policies to build confidence and support growth” and “to achieve fiscal consolidation,” while countries with surplus will “boost domestic demand,” said the communique.

The leaders pledged to support the IMF’s proposal of establishing “a single facility to fulfill the emergency assistance needs of its members”.

To contain the Greek debt crisis from spilling over to larger economies, the IMF was given a new responsibility to monitor Italy’s policy implementation in its economic reforms on a quarterly basis, joined by the European Commission.

In the meantime, G20 leaders made a step to strengthen financial regulations by calling for reaping benefits from financial integration.

However, aside from agreeing to task several international organisations to assess CDS (credit default swaps) functions and enhance management against speculation, the G20 leaders failed to iron out differences over the introduction of a financial transaction tax (FTT), which has been eagerly promoted by this year’s G20 host France.

Sarkozy said Spain, Brazil, Argentina and South Africa along with France and Germany expressed support for the tax, but the US, Canada and some other big powers still oppose it.

Nevertheless, the G20 Summit is marked by a significant improvement on tax matters as they have all adopted the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which means wider global cooperation on tax issues.

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