MercoPress. South Atlantic News Agency

Global organizations warn of protectionist “tendencies”

Chancellor Angela Merkel

German Chancellor Angela Merkel and the heads of the world's five leading financial organizations pledged Thursday in Berlin to increase cooperation as part of a joint effort to combat the global economic recession and called on all countries to resist “protectionist tendencies”.

"This is a global crisis and it needs global solutions" Merkel said in a joint statement issued after talks on Thursday with International Monetary Fund Managing Director Dominique Strauss-Kahn, WTO Director-General Pascal Lamy, World Bank President Robert Zoellick, ,the head of the Organization for Economic Cooperation and Development Angel Gurria and International Laboor Organization Director-General Juan Somavia. The leaders outlined five areas of future action, with the first stating that "only the effective development of the social-market economy" can guarantee economic growth. A new framework is needed that "prevents excesses in the market and works to counter future crises," they said. "Existing OECD instruments, including for corporate governance, for fighting corruption or for cooperating in fiscal affairs, could serve as the basis of a new charter for sustainable economic governance." The Group of 20 leading developed and developing nations is "working intensively to reorient the global financial architecture," the statement said. The G-20 meeting in London in April should "strengthen the international financial architecture." They also said that all countries "have a duty to resist protectionist tendencies" and to "work toward tangible further opening of world trade and ensure that their stimulus packages do not disrupt trade." Merkel also praised Washington for weakening language in the economic stimulus package calling for the use of US made iron and steel for public construction projects, describing it as a "good signal". "We don't so ourselves any favours, particularly in a crisis when we close ourselves off", said Merkel speaking with reporters at the end of the Berlin meeting. The German Chancellor anticipated she would be asking British PM Gordon Brown to invite the leaders of the five financial organizations to the April G20 summit. Merkel's spokesperson Thomas Steg also announced Germany will host European leaders in Berlin next February 22 to discuss changes in the global financial system before an April summit of G20. The aim is to consider new regulations for financial markets and seek a "strong European position" to combat the economic crisis.