Deficits put on priority as financial talks finish
Source: Agencies |
June 7, 2010, Monday
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Print Edition
Print Edition
WORLD financial leaders pledge in South Korea to push ahead on curbing deficits and crafting financial reforms to safeguard the global recovery, including making banks bear much of the burden for government bailouts.
Finance ministers and central bank chiefs met in the southern city of Busan to finesse what some said were at times heated differences over how to reshape financial rules and build safety nets for countries hit by debt crises.
China was represented by Finance Minister Xie Xuren and People's Bank of China Governor Zhou Xiaochuan.
The Group of 20 welcomed measures taken by the European Union, the European Central Bank and the International Monetary Fund, including a US$1-trillion bailout, to help countries cope with the fallout from high debt.
"All of us have a strong interest in seeing those programs succeed in restoring confidence," United States Treasury Secretary Timothy Geithner said after the meetings ended on Saturday when a communique was released.
Long-term, sustainable growth would depend on rebalancing growth, he said.
Europe's sovereign debt crisis - and Hungary's warning that it risks a Greek-style meltdown of its own - sharpened worries that the global economy could succumb to another downturn following the one sparked by the US subprime mortgage crash of 2008 that ballooned.
The levels of indebtedness among many countries had driven home the need to restore what in G-20 speak is called "fiscal sustainability," participants said.
"There is a significant change of tone in the language that the G-20 uses on the issue of fiscal sustainability and there is a very explicit reference in the communique to those countries with serious fiscal challenges needing to accelerate the pace of consolidation," said British Chancellor George Osborne.
While the euro fell below US$1.20 for the first time in more than four years last Friday in reaction to Hungary's woes, European officials said the problem was being overstated.
European Central Bank President Jean-Claude Trichet called the euro a "solid currency, a credible currency, a currency that has kept its value in terms of price stability."
The talks have prepared the way for a G-20 leaders' meeting in Canada this month.
While there seems to be strong consensus on the broad strokes of what needs to be done, the difficulty is in technical details for reforming financial regulations, including how banks and other financial institutions might bear the burden for government bailouts and other interventions.
Finance ministers and central bank chiefs met in the southern city of Busan to finesse what some said were at times heated differences over how to reshape financial rules and build safety nets for countries hit by debt crises.
China was represented by Finance Minister Xie Xuren and People's Bank of China Governor Zhou Xiaochuan.
The Group of 20 welcomed measures taken by the European Union, the European Central Bank and the International Monetary Fund, including a US$1-trillion bailout, to help countries cope with the fallout from high debt.
"All of us have a strong interest in seeing those programs succeed in restoring confidence," United States Treasury Secretary Timothy Geithner said after the meetings ended on Saturday when a communique was released.
Long-term, sustainable growth would depend on rebalancing growth, he said.
Europe's sovereign debt crisis - and Hungary's warning that it risks a Greek-style meltdown of its own - sharpened worries that the global economy could succumb to another downturn following the one sparked by the US subprime mortgage crash of 2008 that ballooned.
The levels of indebtedness among many countries had driven home the need to restore what in G-20 speak is called "fiscal sustainability," participants said.
"There is a significant change of tone in the language that the G-20 uses on the issue of fiscal sustainability and there is a very explicit reference in the communique to those countries with serious fiscal challenges needing to accelerate the pace of consolidation," said British Chancellor George Osborne.
While the euro fell below US$1.20 for the first time in more than four years last Friday in reaction to Hungary's woes, European officials said the problem was being overstated.
European Central Bank President Jean-Claude Trichet called the euro a "solid currency, a credible currency, a currency that has kept its value in terms of price stability."
The talks have prepared the way for a G-20 leaders' meeting in Canada this month.
While there seems to be strong consensus on the broad strokes of what needs to be done, the difficulty is in technical details for reforming financial regulations, including how banks and other financial institutions might bear the burden for government bailouts and other interventions.
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