London – Mar 14, 2009 – Finance ministers and central bankers from the world’s big economic powers moved Saturday to paper over sharp differences in their efforts to combat the global recession with a pledge to return the international economy to growth. … following the meeting … the finance ministers had ‘reached a consensus for further action and for reform of the global financial system.’
As governments have responded to the economic crisis over the past several months, it is always the finance ministers and central bankers who have led the way. We have been told over and over again that only these financial experts, with their experience and insider knowledge, can hope to deal with the crisis.
So here we have a pre-G20 meeting, with just the financial people, and they’ve reached a consensus. We aren’t being told what that consensus is, but there can be little doubt that the full G20 will endorse what the finance ministers have agreed to. They’ve been designated as the experts by all concerned, and they’ve reached a consensus. How could a bunch of politicians go against that? If they were going to stand up to the bankers, they would have done it long ago.
It seems that Geithner has let the cat out of the bag, as regards the consensus, with his surprise statement that the US was willing to endorse a new international currency, a move that would lead directly to the establishment of the IMF as a super-sovereign global central bank:
FLASH ** US Backing for World Currency Stuns Markets **
where we read: US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is “quite open” to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund. … The Chinese proposal, outlined this week by central bank governor Zhou Xiaochuan, calls for a “super-sovereign reserve currency” under IMF management, turning the Fund into a sort of world central bank. … Beijing has the backing of Russia and a clutch of emerging powers in Asia and Latin America.
With China, Russia, and the US all officially on board with a consensus of the finance people, a global central bank seems to be done deal at this point. Let us then consider the other big issues on the table before the G20:
• regulation of financial markets
• stimulus packages
As regards protectionism, we know they will all come out against it, and that they’ll cheat anyway. If only they’d cheat more, we might be better off. As regards regulation of financial markets, that will be provided by the central-bank proposal. As regards stimulus packages, there will clearly be no consensus. Obama has obviously already gone ahead with a stimulus agenda, while here we learn that the Europeans are dead set against such an agenda:
European powers rebuff US, British proposals for economic stimulus
Based on this analysis, we may already know the major outcomes of the G20. If so, it will be interesting to see what spin the politicians put on it, as they seek to take credit and score points. They are unlikely to describe the outcomes for what they are: a transfer of global national sovereignty to a financial clique, plus an austerity program for the people of the world.
G20 finance chiefs vow to restore global growth (Roundup)
Mar 14, 2009, 18:40 GMT
Read more: “G20 finance chiefs vow to restore global growth (Roundup)” –http://www.monstersandcritics.com/news/business/news/article_1464701.php#ixzz0BDNFcc4i
London- Finance ministers and central bankers from the world’s big economic powers moved Saturday to paper over sharp differences in their efforts to combat the global recession with a pledge to return the international economy to growth.
‘We are prepared to take whatever action is necessary.’ said British Chancellor of the Chequer Alistair Darling, who chaired the meeting of Group of 20’s (G20) financial chiefs.
Held in the neo-Jacobean splendour of the South Lodge Hotel in the rolling green countryside on the outskirts of London, the meeting of finance ministers and central bankers helped to set the stage for next month’s G20 summit in London of the leaders from rich and emerging economies.
The G20 recognized the ‘sense of emergency’ surrounding the global Economy, Darling told a press conference following the meeting, saying the finance ministers had ‘reached a consensus for further action and for reform of the global financial system.’
In their communique, the finance chiefs called on the participants in the London summit to agree to close off all the gaps in the world regulatory system. That would include cracking down on hedge funds and stepping up supervision of credit rating agencies.
The finance ministers also want to see moves ‘to prevent the build-up of systemic risk’ in the global financial system and the launch of an early warning system by the International Monetary Fund (IMF) and Financial Stability Forum to guard against similar crises.
The ministers also agreed to beef up the funds for organizations such as the IMF and the Asian Development Bank that play a critical role in throwing nations a financial lifeline during times of economic crises.
Additionally, they repeated warnings about the risks posed by protectionism as some government’s struggled to shield their economies from the fallout from the current global financial firestorm.
‘We have taken decisive, coordinated and comprehensive action to boost demand and jobs,’ the finance chiefs said in their communique.
‘Our key priority now is to restore lending by tackling, where needed, problems in the financial system head-on, through continued liquidity support, bank recapitalization and dealing with impaired assets, through a common framework,’ the communique said.
The two-day meeting of G20 finance officials in the South Lodge Hotel’s wood-panelled rooms came in the wake of signs of a rift between Europe and Washington over the need to pump more money into the global economy to try to haul it out of its present downward spiral.
While US President Barack Obama’s administration has been pressing the major economic states to produce additional fiscal plans, European leaders such as German Chancellor Angela Merkel and French President Nicolas Sarkozy have ruled out more pump priming.
Instead, Merkel and Sarkozy have stressed the need for overhauling the global financial structure as a way of cleaning up the international banking and financial systems, so as to help avert financial crises in the future.
But speaking after the meeting Saturday, US Treasury Secretary Timothy Geithner attempted to play down the talk of tensions in the G20.
He told reporters a broad consensus had been forged globally ‘on the need to act aggressively to restore growth to the global economy’.
Geithner went on to say the G20 would make ‘concrete changes’ to the world financial system. Those changes include stronger oversight.
Geithner foreshadowed reforms to the US financial system that are to be set out in the coming weeks, saying they would form part of ‘a global move to higher standards.’
Formed in 1999, the G20 includes the world’s top industrialized nations, such as Britain, the United States, Germany and France, as well leading emerging economies, such as China, India, Brazil and Saudi Arabia.
The G20 leaders last met in November in Washington to draw up an action plan to try to contain the fallout as the world’s economy entered its biggest downturn since the Great Depression.
Next month’s G20 leaders’ summit in London will represent only the second time that the group’s government heads have met together since the organization was formed.
Read more: “G20 finance chiefs vow to restore global growth (Roundup)” –http://www.monstersandcritics.com/news/business/news/article_1464701.php#ixzz0BDNNGhUy
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