G-20 Summit Offers $1 Trillion In Economic Help
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For at least the third time in recent weeks the stewards of our economy have found a way to say they're throwing another trillion dollars into the fight. The latest trillion was pledged in London where leaders of the world's biggest economies met. And as NPR's John Ydstie reports the pledge is about a trillion dollars more than some might have feared.
JOHN YDSTIE: In the days just prior to the G-20 meeting high expectations alternated with fears of a walkout by some leaders that could lead to collapse. But when the summit host, British Prime Minister Gordon Brown, reported the result of the meeting yesterday, he said the world had come together to fight back against the global recession.
Prime Minister GORDON BROWN (Britain): These are not just a single collection of actions; this is collective action, people working together at their best. I think the new world order is emerging and with it the foundations of a new and progressive era of international co-operation.
YDSTIE: That new world order includes tougher regulation for a global economy run off the rails by too much risk taking, including more controls on hedge funds and tax havens and common global principles on executive pay. The new world order also boosts the resources of the international monetary fund and World Bank. The leaders pledged more than a trillion dollars. most of it to aid middle income and developing countries hit hard by the downturn.
Brown said The IMF and a body called the Financial Stability Board would also get new responsibilities.
Prime Minister BROWN: Alongside these extra resources, we will ask the international institutions to strengthen their independent surveillance of the world economy and to promote growth and the reduction of poverty.
YDSTIE: Among the duties keeping tabs on huge firms that might pose a risk to the global economy. The IMF will also assess whether additional fiscal stimulus is needed around the globe. Coming into the summit President Obama pushed for even greater stimulus spending by the G-20 economies, but European leaders, including French President Sarkozy and German Chancellor Merkel, opposed that arguing that the summit should focus on curbing the excesses of global capitalism. In the days before the summit, it was feared those differences might be fatal. But after the meeting yesterday President Obama said the fears were overblown.
President BARACK OBAMA: Some commentators confused honest and open debate with irreconcilable differences.
YDSTIE: In fact it turns out President Obama played a role in bridging the differences between France and China over the regulation of tax havens, but the president failed in his effort to get more stimulus spending. During his news conference, he was asked to assess his performance.
Pres. OBAMA: Overall, I'm pleased with the product and I leave it to others to determine whether me and my team had anything to do with that.
YDSTIE: Mr. Obama remarked that there had been comparisons made between this summit and the last overhaul of international economic architecture at Bretton Woods in 1944. He suggested that getting agreement among the 20 leaders in London might have been more challenging.
Pres. OBAMA: Well, if it's just Roosevelt and Churchill sitting in a room with a brandy, yeah, that's a easier negotiation.
(Soundbite of laughter)
Pres. OBAMA: But that's not the world we live in, and it shouldn't be the world that we live in.
YDSTIE: Indeed, the new world order that includes rising powers like China and a humbling of U.S. style free market capitalism probably means less power for the United States to orchestrate the outcome of these kinds of global economic meetings.
John Ydstie, NPR News, London.
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