G20 summit agrees $1 trillion in funds

French President Sarkozy said the results were beyond what could have been imagined and said the Anglo-Saxon model of lightly regulated markets was over.

G20 summit agrees $1 trillion in funds
World leaders at the G20 summit in London have agreed on a compromise package of $1 trillion in stimulus cash and more market regulation to combat the worst economic crisis since the 1930s.

U.S. President Barack Obama played down differences at the summit and declared it a "turning point" for the world economy. French President Nicolas Sarkozy celebrated the waning of the Anglo-Saxon model linked by many to the excess that triggered the crisis.

Stocks rallied but economists cautioned against euphoria.

"We have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this from happening again," Obama told a news conference. "We've also rejected the protectionism that could deepen this crisis."

At the G20 summit, the leaders agreed to publish a blacklist of tax havens that could lead to sanctions -- something France and Germany had pushed hard for -- and to impose oversight on large hedge funds and credit rating agencies for the first time.

"Today's agreement begins to crack down on the cowboys in financial markets that have brought global markets undone," Australian Prime Minister Kevin Rudd said.

British Prime Minister Gordon Brown, the summit host, said governments had committed $5 trillion to public stimulus of the economy this year and next, before even taking into account the extra commitments from the summit in London.

He did not say how that squared with the stimulus estimate he gave just a day earlier -- of about half that amount.

The summit also agreed a trade finance package worth $250 billion over two years to support global trade flows, which have shrunk under the impact of the credit crunch.

But some economists noted the new IMF funds masked the lack of agreement on further fiscal stimulus at national levels, something the United States, UK and Japan wanted but France and Germany strongly resisted.

The G20 said in a communique the measures taken would raise world output by four percent by the end of next year.

Tax haven issue

French President Nicolas Sarkozy said the results were beyond what could have been imagined and said the Anglo-Saxon model of lightly regulated markets was over.

Germany's finance minister welcomed the fact that no obligation was agreed for countries to adopt further stimulus packages. The issue had created tension in the summit build-up, with Washington favouring such packages and Paris and Berlin preferring to let earlier measures take their course.

Switzerland and a host of other financial centres under fire over bank secrecy have announced in recent weeks that they will shift towards international standards of information disclosure.

The tax haven issue had threatened to be a stumbling block to agreement, with France and Germany demanding a crackdown on jurisdictions whose bank secrecy laws they portrayed as enabling the rich to dodge taxes at a time of economic hardship.

"Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model -- it's not my place to criticise it, it has its advantages -- clearly, today, a page has been turned," France's Sarkozy said, referring to the landmark conference that created the post-war economic order.


Güncelleme Tarihi: 03 Nisan 2009, 15:02