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G7, G20 meet to 'follow-up' on London summit
(Agencies)
Updated: 2009-04-24 14:20 WASHINGTON – The finance officials of the Group of 20 developed and developing countries meet here to try to fine-tune their responses to the global economic crisis after the London G20 summit.
In a speech Wednesday previewing these meetings, US Treasury Secretary Timothy Geithner, their host, did not mention once the G7, a longstanding forum of advanced economies: Britain, Canada, France, Germany, Italy, Japan and the United States. By contrast, Geithner spoke several times about the G20, a relatively new grouping, created 10 years ago, that includes the G7, the European Union, and Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Much like the last G7 meeting in Washington in October, the United States, the world's largest economy and the epicenter of the crisis, struck a collegial tone, avoiding any hint of the economic lessons it had been fond of giving in the past. "The rest of the world needs the US economy and financial system to recover in order for it to revive. ... Just as importantly, we need the rest of the world to recover if we are to prosper again here at home,"
"The world economy is going through the most severe crisis in generations. We each face somewhat different challenges and thus are not all in the same boat. But we are all in the same storm," said the treasury secretary, urging countries to work together to combat the crisis. "We bear a substantial share of the responsibility for what has happened," he admitted. The G20 and G7 meetings come in the context of grim IMF forecasts for a sharp drop in global output. The IMF projects the global economy will contract 1.3 percent this year and grow only 1.9 percent in 2010 in its World Economic Outlook report published Wednesday. Geithner said the G20 and G7 meetings Friday would offer "a good opportunity to follow up" on the decisions of the London summit on April 2. The leaders of the G20, whose members produce more than 85 percent of the world's output, agreed to cooperate closely to kick-start the moribund global economy and reform financial institutions. Although World Bank president Robert Zoellick called on the G20 to follow through on their commitments -- "in addition to communiques, you've got to have delivery" -- a Treasury official signaled that no major announcements were expected from the G20 and G7 meetings. These meetings mainly will provide the opportunity to exchange updates on countries' economic conditions, the official said. Geithner has indicated that he would urge the G20 partners to continue to support their respective economies long enough so that a recovery can take root, like the US is trying to do with its US$787-billion, three-year stimulus program launched in February. The G7 and G20 meetings also were expected to be used to push forward pledges to reform the financial system, albeit focused more on national reforms than on a international scale. The G20's London promises of massive new resources for the International Monetary Fund and the World Bank also were to figure on the agenda. The IMF was the main beneficiary at the G20 summit, where leaders agreed to triple its war chest to US$750 billion by adding US$500, some of it already pledged. France late Thursday signed a commitment to provide the IMF with an additional US$16 billion to help fight the worst global financial crisis since the 1930s Great Depression. French Finance Minister Christine Lagarde signed the accord in Washington, after meeting with IMF managing director Dominique Strauss-Kahn. |
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