L-R: IMF Managing Director Dominique Strauss-Kahn chats with US Treasury Secretary Tim Geithner and France's Finance Minister Christine Lagarde following a meet at the IMF/World Bank Spring Meetings.24 April 2010
G20 hails global rebound, urges 'credible' exit strategies
WASHINGTON: G20 finance ministers hailed Friday a better than expected economic recovery and urged governments to draw up "credible" plans to unwind measures taken to tackle the global crisis.
"The global recovery has progressed better than previously anticipated largely due to the G20's unprecedented and concerted policy effort," a statement said after ministers from the leading developed and developing economies met in Washington.
"We should all elaborate credible exit strategies from extraordinary macroeconomic and financial support measures that are tailored to individual country circumstances."
The statement made no mention of Greece, hammered by a debt crisis that has called into question the stability of the eurozone and the strength of the global economic recovery.
G20 finance ministers did, however, ask the International Monetary Fund to weigh levying taxes on big banks to help stem risk and pay for possible future financial failures.
The measures would consider "how the financial sector could make a fair and substantial contribution towards paying for any burdens associated with government interventions to repair the banking system," the statement said.
The meeting had nonetheless been overshadowed by the specter of a Greek default and the prospect that its budget woes could be replicated in other eurozone nations.
Ending weeks of speculation, Athens earlier asked for a 45-billion-euro (US$60-billion) bailout from the European Union and IMF to keep the state afloat.
Germany's central banker, Axel Weber, had warned of an increased risk that Greece's debt crisis would spread to other nations because many countries were running excessive budget deficits.
"The risk of contagion has increased over the last weeks," Weber told reporters in Washington. "Many countries are running excessive budget deficits."
Eurozone members Portugal, Italy, Ireland and Spain are all in the firing line, and concern has also been voiced regarding Britain and the United States.
In a bid to ease tensions, IMF chief Dominique Strauss-Kahn said the fund would move "expeditiously" to roll out the Greek bailout.
But Germany warned it may still veto the bailout unless Athens takes steps to rein in its budget.
"The savings plans absolutely have to be credible," said German Chancellor Angela Merkel, who faces regional elections in May.
G20 ministers also face tough discussions about how to prevent the global economy lapsing back into the deep crisis caused by a financial meltdown.
IMF deputy head John Lipsky said the world lending institution had offered plans for a tax on banks to limit risk-taking and provide funds in case another bank fails.
He said the tax would be "a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system."
Governments around the world spent trillions of dollars to prop up markets after risky bank investments turned sour, sending many countries, including Greece, further into debt.
The new measures would see lenders and other financial institutions pay a further tax on profits and pay, a move to stem excessive risk-taking.
Ministers also discussed how to rebalance the global economy, a task made more complex by growing differences between the recovery in emerging and advanced economies.
Brazil, China and India have emerged from the downturn in much better shape than their European, US and Japanese counterparts.
The International Monetary Fund has predicted that advanced economies will grow just over three per cent this year, while emerging and developing economies will grow over six per cent.
AFP
WASHINGTON: G20 finance ministers hailed Friday a better than expected economic recovery and urged governments to draw up "credible" plans to unwind measures taken to tackle the global crisis.
"The global recovery has progressed better than previously anticipated largely due to the G20's unprecedented and concerted policy effort," a statement said after ministers from the leading developed and developing economies met in Washington.
"We should all elaborate credible exit strategies from extraordinary macroeconomic and financial support measures that are tailored to individual country circumstances."
The statement made no mention of Greece, hammered by a debt crisis that has called into question the stability of the eurozone and the strength of the global economic recovery.
G20 finance ministers did, however, ask the International Monetary Fund to weigh levying taxes on big banks to help stem risk and pay for possible future financial failures.
The measures would consider "how the financial sector could make a fair and substantial contribution towards paying for any burdens associated with government interventions to repair the banking system," the statement said.
The meeting had nonetheless been overshadowed by the specter of a Greek default and the prospect that its budget woes could be replicated in other eurozone nations.
Ending weeks of speculation, Athens earlier asked for a 45-billion-euro (US$60-billion) bailout from the European Union and IMF to keep the state afloat.
Germany's central banker, Axel Weber, had warned of an increased risk that Greece's debt crisis would spread to other nations because many countries were running excessive budget deficits.
"The risk of contagion has increased over the last weeks," Weber told reporters in Washington. "Many countries are running excessive budget deficits."
Eurozone members Portugal, Italy, Ireland and Spain are all in the firing line, and concern has also been voiced regarding Britain and the United States.
In a bid to ease tensions, IMF chief Dominique Strauss-Kahn said the fund would move "expeditiously" to roll out the Greek bailout.
But Germany warned it may still veto the bailout unless Athens takes steps to rein in its budget.
"The savings plans absolutely have to be credible," said German Chancellor Angela Merkel, who faces regional elections in May.
G20 ministers also face tough discussions about how to prevent the global economy lapsing back into the deep crisis caused by a financial meltdown.
IMF deputy head John Lipsky said the world lending institution had offered plans for a tax on banks to limit risk-taking and provide funds in case another bank fails.
He said the tax would be "a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system."
Governments around the world spent trillions of dollars to prop up markets after risky bank investments turned sour, sending many countries, including Greece, further into debt.
The new measures would see lenders and other financial institutions pay a further tax on profits and pay, a move to stem excessive risk-taking.
Ministers also discussed how to rebalance the global economy, a task made more complex by growing differences between the recovery in emerging and advanced economies.
Brazil, China and India have emerged from the downturn in much better shape than their European, US and Japanese counterparts.
The International Monetary Fund has predicted that advanced economies will grow just over three per cent this year, while emerging and developing economies will grow over six per cent.
AFP
