Top finance ministers pledge sustained effort against recession

March 15th, 2009 - 12:59 am ICT by IANS  

London, March 14 (DPA) Finance ministers and central bankers from the world’s big economic powers moved Saturday to paper over sharp differences in their efforts to combat the global recession.
The Group of 20’s (G20) top financial officials said they were committed “to deliver the scale of sustained effort necessary to restore growth” and to set the stricken global economy back on the path to recovery.

Held in the neo-Jacobean splendour of the South Lodge Hotel in the rolling green countryside on the outskirts of London, the meeting of finance ministers and central bankers helped to set the stage for next month’s G20 summit in London of the leaders from rich and emerging economies.

The two-day meeting of G20 finance ministers and central bankers in the South Lodge Hotel’s wood-panelled rooms came in the wake of signs of a deepening rift between Europe and the new Obama administration in the United States over the need to pump more money into the global economy to try to haul it out of its present downward spiral.

While US President Barack Obama’s administration has been pressing the major economic states to produce additional fiscal plans, European leaders such as German Chancellor Angela Merkel and French President Nicolas Sarkozy have ruled out more pump priming.

Instead, they have stressed the need for overhauling the global financial structure as a way of cleaning up the international banking and financial system, so as to help avert financial crises in the future.

Both Japan and China, which are also members of the G20, have sided with the US, seeing the need for possible further fiscal action aimed at containing the fallout from the global economic downturn.

This, in turn, has raised concerns about whether the G20 leaders will be able to hammer out what British Prime Minister Gordon Brown, the host of the April London summit, has called “a new global deal” to help haul the world economy out of its biggest downturn since the Great Depression.

Formed in 1999, the G20 includes the world’s top industrialized nations, such as Britain, the US, Germany and France, as well as leading emerging economies, such as China, India, Brazil and Saudi Arabia.

Next month’s G20 leaders’ summit in London will represent only the second time that the group’s government heads have met together since the organization was formed.

At their first meeting in Washington last November, the G20 leaders agreed to a two-pronged approach to ward off the economic crisis.

This involved fiscal stimulus plans, along with a remake of the global financial system, which included strengthening key institutions such as the International Monetary Fund and beefing up world financial market supervisory bodies.

Merkel expressed confidence Saturday that the leaders of the world’s biggest economic powers would be able to bridge their differences and reach agreement at their summit next month on steps to combat the global recession and the financial crisis.

Speaking at a joint press conference with British Prime Minister Brown, Merkel said she was “very optimistic that we can come up with good results” at the London summit of the G20 states.

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