February 28, 2024

G-20 Statement Aims to Reassure World Markets

WASHINGTON — The world’s major economies released an unexpected joint statement Thursday night reiterating their commitment to the stability of banks and financial markets, seeking to soothe nervous investors on six continents.

“We are committed to supporting growth, implementing credible fiscal consolidation plans, and ensuring strong sustainable growth,” said the communiqué from the Group of 20 nations. “This will require a collective and bold action plan with everyone doing their part.”

The statement, however, did not include commitments to new actions, or any talk of additional support for Europe. It also does not hasten the plan of the member nations to announce any actions at a November meeting of heads of state in Cannes, France.

The possibility of more immediate action also was not discussed at a dinner for member finance ministers and central bank governors Thursday night, according to a senior Treasury Department official who insisted on anonymity because the conversations were private.

Instead, the members of the European monetary union expressed their determination to complete a planned expansion of a European bailout fund, so that it can purchase the debt of troubled countries. Other nations expressed their concern and support, the official said.

The snap decision to issue a statement — the dinner was intended as an informal gathering before the opening Friday of the annual meeting of the World Bank and the International Monetary Fund — is a reflection of rising concern about the health of the global economy.

The statement cited problems including indebted countries, fragile banks, turbulent markets, weak growth and “unacceptably high unemployment.”

The I.M.F. -World Bank meeting is traditionally a chance for nations to address problems in the developing world. This year, however, the meeting has been given over to talk about problems in Europe and the United States.

There is growing evidence that those issues are weighing on the economies of developing nations by unsettling their markets.

“The immediate problem at hand is to get growth back on track in developed countries,” the countries Brazil, Russia, India, China and South Africa said in a statement Thursday. In language more often directed at poorer countries, the five nations called on developed countries “to adopt responsible macroeconomic and financial policies.”

Even traditional allies are expressing growing frustration with the political paralysis and economic problems of Europe and the United States.

The leaders of six members of the G-20 released a letter Thursday to Nicolas Sarkozy, president of France, calling for “decisive action to support growth, confidence and credibility.”

The six countries — Australia, Britain, Canada, Indonesia, Mexico and South Korea — have little in common except that they are not members of the European Union. Yet, they stressed the need for stronger steps.

“The barriers to action are now political as much as economic,” the letter said. “We must send a clear signal that we are ready to take the actions necessary to maintain growth and stability for all for the future.”

The United States elevated the meetings of the G-20 during the financial crisis after concluding that its traditional meetings with six other countries — the Group of 7 — were excluding too many important players. The nations now represented at the table account for about 85 percent of global economic output.

Article source: http://www.nytimes.com/2011/09/23/business/global/g-20-statement-aims-to-reassure-world-markets.html?partner=rss&emc=rss

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