Category: G20

Hopeful of pact on G20 policy coordination – India

Reuters | Nov 11, 2010 | 3:18pm IST

Group of 20 nations should not be too demanding in respect to policy coordination because it has never been tried before, but eventually "some agreement" should be possible, India’s chief G20 negotiator said on Thursday.

G20 SeoulEfforts by several nations to hold down their currencies to prop up exports and growth and the U.S. Federal Reserve’s bond-buying spree blamed for the dollar’s weakening have spurred fresh calls for coordination of national policies.

But Montek Singh Ahluwalia told Reuters nations needed to be realistic in their expectations of what could be achieved. "The real issue is given that it is a problem, how do we coordinate policy? I don’t think you should be too demanding … because such policy coordination has never been attempted before," he said on the sidelines of a G20 summit. "I am hopeful we will get some agreement and I’m sure it will take time."

Germany and several other nations have hit out at a U.S. plan to consider setting specific limits on current account imbalances, while some countries, notably China, have come in for criticism for intervening in currency markets.

Continue reading

Advertisements

Trichet says EU fiscal reform too weak for euro zone

Reuters | Oct 23, 2010 | 9:34pm IST

European Central Bank President Jean-Claude Trichet said on Saturday that new European Union fiscal rules pushed by France and Germany were too weak to safeguard the euro zone. EU finance ministers agreed on Monday to toughen the bloc’s budget rules to prevent future sovereign debt crises after an agreement struck in France between President Nicolas Sarkozy and German Chancellor Angela Merkel, which diluted initial plans.

TrichetGerman magazine Spiegel reported that Trichet had warned French and German officials at Monday’s meeting of European Council President Herman van Rompuy’s taskforce on fiscal reform, that their actions could threaten the coherence of the euro zone. However, Trichet said he had simply stuck to the ECB’s position that semi-automatic sanctions were required to ensure the efficacy of any fiscal pact for the 16-nation currency bloc.

"All that I have said … was that I did not subscribe to all elements of the report by the taskforce," said Trichet, who was himself a member of Van Rompuy’s group. Trichet said there was a huge difference between measures which were appropriate for the 27-nation European Union, and those which would bring stability to the 16-country euro zone, which shares monetary policy and institutions.

"The proposal which was agreed by the Commission and the Van Rompuy taskforce report is only appropriate for the 27. For the 16, we think that it could be more ambitious," Trichet said. The ECB had originally called for semi-automatic punishments for countries running up large deficits, including stopping access to European funding and aid.

Continue reading

G20 finance ministers resist US pressure over trade

BBC | 22 October 2010 | 12:21 GMT

US proposals that countries set targets to reduce trade imbalances appeared to be running into opposition at the G20 meeting of leading economies. US Treasury Secretary Timothy Geithner wrote to G20 members on Friday suggesting limiting surpluses and deficits to a percentage of output. But Japan, Germany and Russia expressed opposition to what one delegate called "planned economy" thinking. The proposal is seen as mainly directed at China, which had yet to comment.

FMs of US and ChinaWashington has been pressing China for months – without success – to let its currency appreciate. Getting Beijing to tackle its large trade surplus would be an indirect way of forcing the yuan to rising in value.

In his letter to G20 colleagues on the opening day of a meeting of finance ministers in South Korea, Mr Geithner said countries should aim to reduce surpluses or deficits to a targeted share of gross domestic product. US officials said the target would be 4% of GDP by 2015. China’s current account surplus was 4.9% of GDP in the first half.

Japanese Finance Minister Yoshihiko Noda summed up the mood among other big exporters, including Germany, saying Mr Geithner’s proposal was "not realistic". Australian Treasury Secretary Wayne Swan said he was not sure a "one-size-fits-all" approach could work. Tensions over exchange rates are like to dominate the meeting, being held ahead of a summit by heads of state next month.

Continue reading

G20 summit agrees to reform IMF

BBC | 23 October 2010 | 11:29 GMT

Finance ministers from the G20 leading economies have agreed reforms of the International Monetary Fund, giving major developing nations more of a say. At a meeting in South Korea, they agreed a shift of about 6% of the votes in the IMF towards some of the fast-growing developing countries.

G20 South KoreaThose nations will also have more seats on the IMF’s Board, while Western Europe will lose two seats. But the US will retain the veto it has over key decisions. Such decisions require an 85% vote – Washington holds 17% under the IMF’s weighted voting system.

‘Currency manipulation’

During the talks in the South Korean city of Gyeongji, the ministers also agreed to move towards more market-determined currency systems. The pressure has been on China to end its policy of holding the yuan down to maintain its competitiveness. There was, however, no timetable for change, so Beijing has kept to its long-held position that it will reform its currency policy, but gradually.

Continue reading

Worldwide growth could lag for a decade – paper

Reuters | Aug 27, 2010 | 10:45pm IST

It could be 10 years before economic growth in the United States and elsewhere returns to pre-recession norms and employment rates may never regain lost ground if past history is any guide, two prominent economists said in a paper presented on Friday. Carmen Reinhart and Vincent Reinhart, in a paper presented at an annual conference hosted by the Federal Reserve, found that growth in gross domestic product is significantly lower during the decade after a severe financial crisis that is felt world-wide, as was the case with the recent meltdown. Their assessment could damp the spirits of central bankers gathered at the annual Fed enclave in Jackson Hole, Wyoming, who are already anxious that the recovery from the painful recession has run out of gas and they may be forced to take further steps to stimulate growth.

The authors, a husband and wife team — she is an economics professor at the University of Maryland and he is a former director of the Fed’s division of monetary affairs who is now a resident scholar at the American Enterprise Institute — drew their conclusions from studying global and country-specific crashes, including the 2007 subprime mortgage collapse, the 1973 oil shock, and the 1929 Great Depression. Policy makers should consider that growth, employment and credit may never regain levels attained before 2007, they said. "Recent discussions about the ‘new normal’ in reference to the post-crisis landscape leave the impression that the pre-crisis environment was ‘normal,’" they wrote. "In fact, there are reasons to believe that the pre-crisis decade set a high water-mark distorted by a variety of forces."

Continue reading

U.S. gets tough to make Europe yield IMF power

Reuters | Aug 20, 2010 | 2:55pm IST

The United States has taken unprecedented action at the International Monetary Fund to try to force Europe to give some of its power on the IMF board to emerging economies. The United States, frustrated at Europe’s refusal to share more power, this month declined to back a resolution that would have maintained European dominance over the 24-member board, diplomats from several IMF members countries told Reuters. Washington has long pushed, unsuccessfully, to reduce the number of IMF board seats from 24 to 20 as part of broader reforms that would give rising economic powers a bigger say in IMF decisions, reflecting their growing global clout. Europe has balked at the idea of yielding the nine chairs it currently occupies on the board. Emerging economies like Turkey have expressed interest in a seat on the IMF board. European countries and the United States dominate the IMF in a reflection of the post-World War II order which is being challenged by the rise of nations such as China.

The board is one of the global lender’s main decision-making bodies. It has approved billions of dollars in emergency loans for countries hit by the global financial crisis and oversees the way the Fund is run. Domenico Lombardi, a former IMF board director, said the U.S. action, at an Aug. 6 meeting of the IMF board, reflected frustrations with Europe not only over Fund governance but on broader economic matters.Those issues include differences over new liquidity rules for global banks and Europe’s emphasis on fiscal austerity while Washington stresses the need to ensure economic recovery before belt tightening. The United States has not previously flexed its muscles in such an overt way. “Secretary (Timothy) Geithner supports reforming the IMF executive board to make it better reflect the realities of today’s global economy and ensure that the representation of emerging market and developing countries is strengthened,” a Treasury official said. Continue reading

G20: No charges over Ian Tomlinson demo death

BBC News | 22 July 2010 | 15:36 GMT

A police officer who was filmed pushing a man to the ground during the G20 protests will not face charges over his death. Ian Tomlinson, 47, died after being caught up in the clashes on 1 April 2009 in the City of London. Director of Public Prosecutions Keir Starmer said there was no prospect of conviction because experts could not agree on how Mr Tomlinson died. Mr Tomlinson’s son Paul King described the decision as "outrageous". The officer who was filmed pushing Mr Tomlinson has been named as Pc Simon Harwood from the Metropolitan Police territorial support group. Mr Starmer said there was a "sharp disagreement between the medical experts" about the cause of death, which led to three post-mortem examinations being conducted on Mr Tomlinson. The first examination by Dr Freddy Patel – currently under investigation for alleged misconduct over four unrelated post-mortem examinations – found he died of natural causes linked to coronary artery disease. The second pathologist, Dr Nat Cary, found he died of internal bleeding as a result of blunt force trauma, in combination with cirrhosis of the liver. The third examination agreed with the findings of the second test. It was conducted on behalf of the officer.

Mr Starmer said there were irreconcilable differences between the evidence from Dr Patel and the two subsequent post-mortem examinations. Dr Patel already faces disciplinary proceedings, and could be struck off, by the General Medical Council over alleged failings in his handling of four separate post-mortem examinations between 2002 and 2005. Mr Tomlinson, a newspaper seller who was not involved in the protests, was walking home when he was caught up in the demonstration. The video footage showed him being apparently struck by a baton and then pushed to the ground. He was seen moving away after the incident but was found collapsed 100 metres away in Cornhill. Mr Starmer also said that Mr Tomlinson was bitten by a police dog shortly before the clash.

Setting out the details of the decision, Mr Starmer said: "After a thorough and careful review of the evidence, the CPS (the Crown Prosecution Service) has decided that there is no realistic prospect of a conviction against the police officer in question for any offence arising from the matter investigated and that no charges should be  

Continue reading