The World Bank has called for national governments to seek long-term debt curbs to solve the current sovereign debt crises in Europe and the United States, but said it was too early for special action by the Group of 20 nations.
World Bank president Robert Zoellick also said it was time to push a free trade agenda, warning against rising protectionism as nations seek to solve their debt crisis.
“This is really at a stage where you still have sovereign governments having to make decisions in Europe” Mr Zoellick told reporters in the Australian capital Canberra.
“It really is going to be the responsibility of each of those sovereign entities to make the calls on how they are going to face not only the short-term challenges, often assisted by their central banks, but also go to the medium and long term,” he said.
Zoellick’s comments came as Finance ministers of five nations – Canada, Britain, South Africa, Singapore and Australia – wrote a joint article to urge global action to restore confidence and for governments to do more to restore finances.
The ministers also said more political resolve was needed to strengthen bank balance sheets.
“Credible fiscal plans and stronger banks must be matched by more progress on global rebalancing,” the ministers wrote in an article published in the Financial Times.
Members of the G7 group of leading industrial powers last week promised to take whatever action was needed to steady global financial markets, including joint action in foreign exchange markets if needed.