G-20 Leaders Set Out To Tackle Global Recession
STEVE INSKEEP, Host:
It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.
RENEE MONTAGNE, Host:
And I'm Renee Montagne. World leaders face two big questions as they meet today in London. One is how to end the economic crisis, another is how to keep it from happening again.
INSKEEP: Hi, John.
JOHN YDSTIE: Hi, Steve.
INSKEEP: So if this is a debate between people who want to just fix the immediate economic problem and people who want long term changes, who's winning?
YDSTIE: Over the past couple of days, French President Sarkozy threatened to walk out of these meetings if there wasn't stronger emphasis on reform. Yesterday he was joined in a press conference by German Chancellor Angela Merkel, who said, quote, "This is a historic opportunity to give capitalism a conscience, and we have to seize this opportunity."
INSKEEP: But what kind of regulation are they talking about to impose that conscience?
YDSTIE: Before this crisis we were in a long period of deregulation, and that contributed to the crisis we now face. President Obama acknowledged that again yesterday. The question is how far the pendulum swings back.
INSKEEP: And I suppose also whether the United States makes its own reforms or gets reforms forced on it by the rest of the world; that will be a kind of a political question.
INSKEEP: Let me ask about another thing, John Ydstie. Obviously two of the key players there are the United States and China. How are they getting along?
YDSTIE: Well, U.S. officials were clearly happy with the meeting that President Obama had with China's President Hu Jintao yesterday. President Obama accepted an invitation to visit China later this year and the two sides set up a high level economic and diplomatic task force that includes Secretary Geithner and Secretary of State Clinton. And according to White House officials, they said there were no discussions of the Chinese concerns about the soundness of U.S. Treasury bonds, which they own a lot of.
INSKEEP: Oh yeah, the Chinese have made some remarks in recent weeks about how they're worried about their investment in the United States.
YDSTIE: Yeah, yeah. And apparently this didn't come up. And China and the U.S. were on the same side in this other argument that we've have talked about, saying that more stimulus is what needs to be focused on right now and not regulation.
INSKEEP: Well, let me understand what's going to happen there then. If stimulus - basically lots more government spending - is what China and the U.S. want to have happen, is the rest of the world going to go along?
YDSTIE: The number being talked about now is a tripling of current IMF resources for this purpose to a total of $750 billion, so a lot of stimulus there. The question is where those funds will come from. The EU, Japan, and the U.S. have suggested they will pony up, and China is being asked to do the same. They seem inclined to do that, but in exchange they want a greater voice, greater power in the IMF.
INSKEEP: John, thanks very much.
YDSTIE: You're welcome, Steve.
INSKEEP: NPR's John Ydstie is covering today's G-20 Summit of major world leaders in London.
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