G-20 Leaders Reach Deal On Economy
MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block. A trillion dollars for the IMF and World Bank and a blueprint for regulating global capitalism, it's all in a day's work for the leaders of the G-20 trying to rescue the global economy. Well, not just a day's work, but the announcement came after just one day-long meeting in London today. As NPR's John Ydstie reports, the leaders exceeded expectations.
JOHN YDSTIE: In the days leading up to the summit, there were concerns over a breakdown between those who wanted more stimulus, the U.S. and Britain and China and those who wanted the summit to focus on reining in the unfettered global capitalism that sparked this crisis. That faction included the leaders of France and Germany. In the end, the leaders decided to do both, but in an unexpected way. The summit's host, British Prime Minister Gordon Brown, declared the outcome a success.
Mr. GORDON BROWN (British Prime Minister): Today's decisions, of course, will not immediately solve the crisis, but we have begun the process by which it will be solved.
YDSTIE: The most surprising outcome, a whopping increase in resources for the IMF and World Bank.
Mr. BROWN: We have also agreed today, additional resources of one trillion dollars that are available to the world economy, through the International Monetary Fund and other institutions.
YDSTIE: That money will allow the IMF and World Bank to support the economies of emerging market nations and developing countries. They include countries like the new market economies of Eastern Europe and poor countries in Africa. They've suffered from the global downturn as investors have pulled out money and export markets have dried up. The trillion dollars pledge today will help them recover.
Alongside the effort to stimulate those struggling economies, the leaders approved a series of measures to reform and regulate what they agreed was a global economic system that went out of control. Regulation of hedge funds and tax savings are among those measures, as well as a set of principles aimed at controlling executive pay in bonuses. Prime Minister Brown summed up the actions this way.
Mr. BROWN: These are not just a single collection of actions. This is collective action, people working together at their best. I think a new world order is emerging and with it the foundations of a new and progressive era of international cooperation.
YDSTIE: Later in his news conference, President Obama fended off suggestions that he hadn't achieved his main goal of getting the G-20 countries to pump more fiscal stimulus into their own economies. That's something the Europeans had opposed. He pointed out that the U.S. had supported the large increase in resources for the World Bank and IMF to help emerging economies. And he said that benefits Americans, too, including companies like Caterpillar.
President BARACK OBAMA: So if we want to get Caterpillar back on its feet, if we want to get all those export companies back on their feet, so that they are hiring, putting people back to work, putting money in people's pockets, we've got to make sure that the global economy as a whole is successful.
YDSTIE: Mr. Obama said he was pleased with the final product produced by the leaders and would leave it to others to determine how much influence he and his economic team had had on the outcome. And he said the process had been extraordinary, saying that 10 years ago you couldn't have imagined a meeting like this.
Pres. OBAMA: Former adversaries, in some cases, former mortal enemies, negotiating this swiftly on behalf of fixing the global economy, you would've said that's crazy. And yet it was happening and it happened with relatively little - relatively few hiccups.
YDSTIE: The president joked that the last time the world financial order was reformed at Bretton Woods, it was just Winston Churchill and Franklin Roosevelt working things out over a glass of brandy. This was more difficult, he said, but that's the way the world is now, and he added, that's the way it should be.
John Ydstie, NPR News, London.
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