Business | Markets
World unveils plan to fight crisis
Leaders of the world's biggest economies sought to settle differences over an emergency plan to blunt the bite of the financial crisis.
- Agencies
- Published: 23:41 November 15, 2008
- Image Credit: AP
- US President Bush greets Saudi Arabia's King Abdullah Bin Abdulaziz during the Summit on Financial Markets and the World Economy.
Washington: Leaders of the world's biggest economies sought on Saturday to settle their differences over an emergency plan to blunt the bite of the worst financial crisis in decades.
Presidents and prime ministers from the powers of the 20th century joined the heads of new economic heavyweights such as China and Saudi Arabia for a five-hour meeting in a Washington museum, gathered around a large map of the world symbolising the global nature of their attempted economic rescue plan.
Signs are mounting of a painful economic slump in many regions, with the euro zone slipping into recession according to data last week, unemployment climbing in the United States, automobile makers struggling in Europe and the US and emerging economies slowing.
As the meeting got under way, the International Monetary Fund agreed to a loan worth at least $7.6 billion as part of a bigger plan for Pakistan where foreign currency reserves have dwindled and the risk of a default on its debts has grown.
French officials said the G20 leaders, whose countries represent 85 per cent of the world economy, were to commit in a communique to three principles: stimulus efforts, reform of financial regulation and global governance changes.
President George W. Bush, the US leader hosting the emergency talks of the Group of 20 nations, warned against a relapse into trade protectionism.
Highlights: Quick action for growth
Leaders at the G20 summit laid out a broad framework for further discussions on market reforms. The actions under discussion include:
- Prompt action to boost economic growth and stabilise global financial markets by supporting major fiscal stimulus plans.
- Expanded the role of Financial Stability Forum, an advisory body of financial regulators from rich nations which gives policy recommendations
- Draw up plans on how to implement these regulatory policies, with each country having the discretion to adopt them as it considers appropriate
- Review the International Monetary Fund's role as policeman for financial and economic stability
- Increased IMF funding wherever appropriate
What next
- Opec nations meet on November 29 to decide on further production cuts of up to 1.5 million barrels per day in view of falling oil prices.
- G20 leaders are set to meet again in the first three months of 2009, once US President-elect Barack Obama has taken office.
- Discussions on global financial governance will be taken up at the IMF meetings in Washington in April.
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