G20 agrees $1.1 trillion stimulus package

Friday, 03 April 2009 17:55:19 (GMT+3)   |  

On April 3, the G20 members gathered at the London summit meeting announced a $1.1 trillion stimulus package to fight the global economic crisis.

UK Prime Minister Gordon Brown, host of the G20 summit, announced at the meeting's conclusion that the leaders had committed to $1.1 trillion in new funds that would greatly increase the capital available to the International Monetary Fund. The goal would be a revival in trade, which is expected to contract this year for the first time in 30 years.

But the combination of loans and guarantees fell short of an injection of fresh fiscal stimuli into the economic bloodstream - the result of a stubborn division between Continental Europe and the United States over whether to act now or wait to see whether existing spending measures took effect.

The summit also agreed to take action against non-cooperative jurisdictions, including tax havens, and impose oversight on large hedge funds and credit rating agencies.

At the end of the one-day gathering in London, leaders of the G20 said they would upgrade an existing financial forum to serve as an early warning monitor to flag problems in the global financial system.

Meanwhile, US President Barack Obama, in his first major venture into international diplomacy, failed to get US trading partners to spend more money on job-creating stimulus programs, as the US and Britain have done. The proposal was opposed strongly by France and Germany.

The G20 leaders also said that developing nations, hard-hit and long complaining of marginalization, would get a greater say in world economic affairs. They said they would renounce protectionism and pledged $250 billion in trade finance over the next two years, a key measure to help struggling developing countries.

The G20 leaders agreed to gather again to assess progress on their commitments at the sidelines of the annual United Nations summit in New York in September.


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