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Europe aims to restore G20 reform momentum
Source: Agencies |
February 22, 2009, Sunday
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EUROPEAN leaders will meet in Berlin today determined to inject new momentum into efforts to overhaul the global financial system and show they can come up with a coordinated response to a historic economic downturn.
The world's top powers are under pressure to deliver on pledges made at the November G20 summit in Washington, where they unveiled an action plan for combating the global financial crisis and guarding against future meltdowns.
Since that summit, recessions in Europe and the United States have deepened, forcing governments to push through massive stimulus packages that have rekindled fears of protectionism.
European officials also worry the new US administration of President Barack Obama is too busy with domestic issues to focus on long-term financial reform goals.
With a second G20 summit due to take place on April 2 in London, German Chancellor Angela Merkel has invited European members of the club to the German capital to forge a common stance and keep the reform drive alive.
Ahead of the meeting, she promised in her weekly podcast to push for comprehensive oversight of all markets and financial instruments and said she wanted Europe to present a "united and ambitious front" at the London summit.
But that may prove difficult.
German officials have said in recent days differences exist, notably with Britain, over the regulation of hedge funds.
In a discussion paper for the summit prepared by the German finance ministry and seen by Reuters yesterday, Berlin says all hedge funds should be made "accountable to supervisory authorities", registered and forced to improve transparency.
British Prime Minister Gordon Brown wants EU states to improve coordination of economic support plans ahead of the London summit, his spokesman said yesterday.
"We need to continue to provide fiscal stimulus to our national economies and ensure those are coordinated," he said.
The Berlin summit takes place after a week of back-and-forth accusations of protectionism between European nations, with some of France's partners objecting to its plans to offer 6 billion euros (US$7.6 billion) in state loans to domestic carmakers.
The leaders of Britain, France, Italy, Spain, the Netherlands, the Czech Republic and Luxembourg, as well as the president of the European Commission, finance ministers and central bankers, will arrive at Merkel's Chancellery at 11 am (1000 GMT) and hold a news conference at 2:45 pm (1345 GMT).
German officials say the summit will produce a three to four page "chair's summary" that stops short of a formal communique. Finance ministers are expected to produce a more detailed document laying out a common European stance.
Agreement is expected on giving the International Monetary Fund (IMF) and Financial Stability Forum (FSF) responsibility for overseeing G20 reform progress and on expanding the membership of the FSF to include key emerging economies.
Germany is also pushing for agreement on a near doubling of IMF funds, which currently stand at about US$200 billion. Leaders are also expected to reaffirm their commitment to the successful completion of the Doha round of world trade talks.
Merkel is keen to avoid the meeting being hijacked by new worries about the state of weaker euro zone economies, notably Ireland and Greece, and the financial fragility of EU countries in Eastern Europe.
Germany said on Friday big euro zone states had begun thinking about how they might come to the aid of weaker members in what would be a first for the 10-year-old currency area.
The world's top powers are under pressure to deliver on pledges made at the November G20 summit in Washington, where they unveiled an action plan for combating the global financial crisis and guarding against future meltdowns.
Since that summit, recessions in Europe and the United States have deepened, forcing governments to push through massive stimulus packages that have rekindled fears of protectionism.
European officials also worry the new US administration of President Barack Obama is too busy with domestic issues to focus on long-term financial reform goals.
With a second G20 summit due to take place on April 2 in London, German Chancellor Angela Merkel has invited European members of the club to the German capital to forge a common stance and keep the reform drive alive.
Ahead of the meeting, she promised in her weekly podcast to push for comprehensive oversight of all markets and financial instruments and said she wanted Europe to present a "united and ambitious front" at the London summit.
But that may prove difficult.
German officials have said in recent days differences exist, notably with Britain, over the regulation of hedge funds.
In a discussion paper for the summit prepared by the German finance ministry and seen by Reuters yesterday, Berlin says all hedge funds should be made "accountable to supervisory authorities", registered and forced to improve transparency.
British Prime Minister Gordon Brown wants EU states to improve coordination of economic support plans ahead of the London summit, his spokesman said yesterday.
"We need to continue to provide fiscal stimulus to our national economies and ensure those are coordinated," he said.
The Berlin summit takes place after a week of back-and-forth accusations of protectionism between European nations, with some of France's partners objecting to its plans to offer 6 billion euros (US$7.6 billion) in state loans to domestic carmakers.
The leaders of Britain, France, Italy, Spain, the Netherlands, the Czech Republic and Luxembourg, as well as the president of the European Commission, finance ministers and central bankers, will arrive at Merkel's Chancellery at 11 am (1000 GMT) and hold a news conference at 2:45 pm (1345 GMT).
German officials say the summit will produce a three to four page "chair's summary" that stops short of a formal communique. Finance ministers are expected to produce a more detailed document laying out a common European stance.
Agreement is expected on giving the International Monetary Fund (IMF) and Financial Stability Forum (FSF) responsibility for overseeing G20 reform progress and on expanding the membership of the FSF to include key emerging economies.
Germany is also pushing for agreement on a near doubling of IMF funds, which currently stand at about US$200 billion. Leaders are also expected to reaffirm their commitment to the successful completion of the Doha round of world trade talks.
Merkel is keen to avoid the meeting being hijacked by new worries about the state of weaker euro zone economies, notably Ireland and Greece, and the financial fragility of EU countries in Eastern Europe.
Germany said on Friday big euro zone states had begun thinking about how they might come to the aid of weaker members in what would be a first for the 10-year-old currency area.
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