G-20 Agrees to Cooperate to Solve Global Financial Woes

The world economic summit called together by President Bush is being called a success by the 20 attending countries, who agreed to work together to stem the growing global financial crisis. Highlights:

"The G20 leaders have agreed to a six-point plan for tackling slumping economic activity with stepped-up cooperation, according to the final statement issued after the Washington summit.

At the top of the list, the leaders agreed that 'further actions are necessary to stabilise the financial system.'

They acknowledged that central banks' monetary policies had a role to play in providing support in the face of weakening economic activity, 'as deemed appropriate' in each country.

They also agreed that fiscal measures - usually consisting of tax breaks, cuts and various incentives - could boost domestic demand in the short term 'while maintaining a policy framework conducive to fiscal sustainability.'

The plan also called for emerging and developing countries to gain access to funding through liquidity facilities and other programs and stressed that the International Monetary Fund could play an important role.

The leaders also urged the World Bank and other international lending institutions 'to use their full capacity' to support development in poor countries.

Lastly, the leaders agreed to ensure that the IMF and the World Bank had 'sufficient resources' to help overcome the current crisis."

Bush added, "Those of you who have followed my career know that I'm a free-market person. Until you're told that if you don't take decisive measures, then it's conceivable that our country could go into a depression greater than the Great Depression." The NYT noted that Bush gave fresh clout to developing nations by giving them an equal voice at the summit.

The G-20 consists of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States of America, and the European Union. Members just met earlier this month for their regular meeting in Sao Paulo, Brazil, where they declared "that the current financial crisis is largely a result of excessive risk taking and faulty risk management practices in financial markets, inconsistent macroeconomic policies, which gave rise to domestic and external imbalances, as well as deficiencies in financial regulation and supervision in some advanced countries."

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