21/06/2010
Urging the Group of 20 nations to “safeguard and strengthen” the global economic recovery
All leaders of G-20 (20th largest economies in the world) will address matters to restore the global economy and accelerating the reform of the global financial system, after the succeed of the three highest summits in regard to the economic crisis. All this will take place in their meeting on 26 June.
The Custodian of the Two Holy Mosques will participate in this meeting for the second time to ensure the Saudi role within the group, after he had participated in the first summit held in Washington in 2008.
At next week’s summit, governments will also focus on plans to increase the quality and quantity of capital at banks, increase oversight of derivatives markets and create a framework for winding down large global firms, Obama said.
Following are more details:
All leaders of G-20 (20th largest economies in the world) will address matters to restore the global economy and accelerating the reform of the global financial system after the succeed in accomplishing the three highest summits in regard to the economic crisis. All that will take place in their meeting on 26 June.
At next week’s summit, governments will also focus on plans to increase the quality and quantity of capital at banks, increase oversight of derivatives markets and create a framework for winding down large global firms, Obama said.
President Barack Obama urged the Group of 20 nations to “safeguard and strengthen” the global economic recovery with continued stimulus, setting up a possible split at next week’s leaders’ summit as European governments push to cut budget deficits.
President Barack Obama on Friday urged other G20 countries to boost domestic demand and in-crease exchange rate flexibility to encourage global growth and rebalance the world economy.
In what appeared to be a warning aimed at China and Germany ahead of next weekend’s meeting of G20 heads of government in Toronto, the White House released a presidential letter saying: “I am concerned by weak private sector demand and continued heavy reliance on exports by some countries with already large external surpluses.” .
He also reopened the debate over fiscal policy, which many had thought settled after the recent G20 finance ministers’ meeting. Obama said he is concerned by “significant weaknesses” across the G-20 economies, which amount to about 85 percent of global gross domestic product.
“We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn,” he warned in language likely to be directed particularly at Germany.
The G-20 is formed of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., U.K. and EU.
While Obama endorsed restoring order to public finances in the “medium-term,” his focus on growth is at odds with that of German Chancellor Angela Merkel’s preference for budget cuts amid Europe’s debt crisis. Each strategy carries risks. Continued stimulus risks bondholder revolt over rising debt burdens, while spending cutbacks could tip the global economy back into recession.
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Merkel, the head of Europe’s largest economy, said June 11 she expects to have a “hard time” at the summit and that she will respond that “there is no alternative” to cutting the fiscal deficit.
Chinese officials said in Beijing today that they plan to use the Toronto talks to discuss responses to Europe’s sovereign debt turmoil while keeping the yuan’s value off the agenda. The yuan has been held at about 6.83 yuan to one U.S. dollar since mid-2008 to help protect China’s exporters, drawing threats of tariffs from among U.S. lawmakers.
Moreover; China asked the rest of the world not to interfere in its way of managing its currency.
Ban Ki-moon sent a letter to the G-20, in which he stressed the importance of achieving overall economic growth, depends on the creation of employment and decent work.
