Monday 18 June 2018

$1 trillion G20 plan; 'new world order emerges'

London, April 2, 2009

World leaders agreed a trillion-dollar deal and other important steps on Thursday to combat the deepest economic downturn since the Great Depression. 'A new world order is emerging,' said British Prime Minister Gordon Brown after the G20 summit.

At the summit, the leaders also signed off on plans to commission blacklists of tax havens and tighten financial rules to bring hedge funds and credit rating agencies under closer supervision.

'A new world order is emerging and with it we're entering into a new era of international cooperation,' Brown said in a post-summit press conference.

'This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable,' Brown, the summit host, said.

World markets reacted positively. The index of top European shares was up 5 percent after Japan's Nikkei gained 4.4 percent. On Wall Street, the Nasdaq was up 4 percent and the Dow Jones 3.6 percent.

Brown said that while there were 'no quick fixes', the decisions meant that 'we can shorten the recession and we can save jobs.'    

French President Nicolas Sarkozy said the results were beyond what could have been imagined.

Addressing a key demand from France and Germany, Brown said the leaders agreed 'there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end.'    

He said leaders agreed to commit new resources of $1 trillion that are available to the world economy through the International Monetary Fund and other institutions.

This included $250 billion of IMF reserve units called Special Drawing Rights. 'This is available to all IMF members,' Brown said. In addition, the IMF would see its own resources tripled, with up to $500 billion of new funds.

The G20 also agreed a trade finance package worth $250 billion over two years to support global trade flows.

Key measures taken by the summit:

* Extra $1 trillion for international bodies, including trebling of International Monetary Fund financing to 750 billion dollars 

* G20 nations expect to have spent $5 trillion battling the economic crisis by the end of 2010 

* Extra $ 250 billion dollars for trade finance 

* Agreement to shame and name blacklisted tax havens 

* New rules on pay and bonuses for corporate chiefs 

* IMF will sell billions of dollars of gold reserves to help poor countries 

* Agreement to 'act urgently' to conclude WTO's Doha round 

* G20 leaders will meet again this year 

Tags: IMF | G20 | World recession | tax haven |


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