Sunday, April 5, 2009

The G20 in London: G-force

The G20 outcome is better than nothing, but can the IMF save the world?

WHEN an infamous summit of world powers in London ended in 1933, such was the mood of protectionist acrimony that many argued it would have been better if the meeting had not been held at all. At times in the run up to the G20 gathering of world leaders in London on Thursday April 2nd it looked as if history might be repeated. But the leaders have shown some grit, and some ingenuity in finding money when little is about. Many holes can be picked in their pledges to reflate the world economy and re-regulate global finance. But, at the very least, it was better that they met than not.

The centerpiece of the leaders’ plan is, conveniently, the IMF, which they believe can add an extra $1 trillion in funding to the world economy without the risk of ballooning national budgets, or obstruction from national politicians. That financial conjuring trick gets the G20 out of a bind. Gordon Brown, the British prime minister, has made much of $5 trillion in public spending that governments around the world have promised to help shunt their economies out of recession in 2009-10. But big spenders such as America and Britain are up against their limits and fiscal hawks such as Germany are stubbornly convinced they have done enough. ...



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[Source: The Economist: News analysis - Posted by FreeAutoBlogger]

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