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G20 agrees on an “action plan”, but details will have to wait

Saturday, November 5th 2011 - 08:02 UTC
Full article 4 comments
“We will fight to defend Europe and the Euro,” said President Sarkozy “We will fight to defend Europe and the Euro,” said President Sarkozy

The G20, composed of the world's most powerful economies, come up Friday with an “action plan” to save the world economic and stabilize the global monetary system, according to an official statement from the Group of 20. The continuing Euro zone debt crisis has dominated the summit.

“We will fight to defend Europe and the Euro,” said French President Nicolas Sarkozy at a closing press conference. He said the G20 had agreed to boost the resources of the International Monetary Fund (IMF) and would agree on specific steps by February.

France could not persuade the rest of the G20 to commit hard numbers to providing a bigger financial safety net for the Euro zone, she said.

UK Prime Minister David Cameron disputed the suggestion that there had not been the promised agreements. “There are agreements on both the Euro zone and the IMF,” he said.

But he added: “The problem is not that there isn't a deal - the problem is that not all of the details... have been put in place.”

Mr Sarkozy said that France and Germany were in favour of a financial transactions tax and they hoped it would be implemented in 2012.

US President Barack Obama was enthusiastic about commitments to greater currency flexibility.

“We welcome China's determination to increase the flexibility of the renminbi,” he said

“This is something we've been calling for some time and it will be a critical step in boosting growth.”

German Chancellor Angela Merkel confirmed that no countries outside the Euro zone had offered to contribute to the bailout fund.

The leaders released a final communiqué, which:

• Commits to move “more rapidly” towards greater exchange rate flexibility, without specifically mentioning China
• Agrees to support the IMF and give it more money if necessary
• Welcomes Italy's invitation to the IMF to monitor its economic reforms
• Calls on countries with strong public finances to take steps to boost domestic demand
• Welcomes the Euro zone's plans to restore confidence and financial stability
• Sets up a task force on youth employment

The head of the IMF, Christine Lagarde, told the BBC that she had received a “commitment” from the leaders. “For the moment I have sufficient resources to face requests,” she said.

“But if there was a crisis, if there was escalating demands, then the members of the IMF present in the room today said, 'we'll put what it takes to make sure you can continue to play your systemic role'.”

Categories: Economy, International.

Top Comments

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  • GeoffWard2

    We have a type of Financial Transactions Tax in Brasil, but I have yet to be convinced it is worthy because of the absence of working checks and balances. Thus, the tax can be easily recouped by the 'authorities'/banks/etc by adding equivalent charges onto the transaction to cover the tax. So the total cost is borne by the end user, the 'man in the street'. OK, if that's the intention.
    But it seems to me that there is a section of the world-public that think this Financial Transactions Tax will be a tax on the *Bankers* and banks to 'pay them back for what they have done to us'.

    Again, you can help me out here.

    Nov 05th, 2011 - 12:07 pm 0
  • ElaineB

    I cannot see it happening. The US and UK are opposed to it for obvious reasons. Without their consent it will not happen.

    Nov 05th, 2011 - 04:16 pm 0
  • Yuleno

    Looks like we'll have to wait for them to agree among themselves what's best for them,and the rest of us will just have to carry on.the changes in power distribution should get revealed more clearly in the eventual settlement.draw out any savings you can't afford to lose as only the 'middle class' can be the resource centre to fund this action plan with no details or therefore's only an agreement that something has to be done.let the fallouts begin weakest to the wall

    Nov 06th, 2011 - 12:11 pm 0
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