G20 leaders to sign coordination charter

Gavin Cordon,Press Association
Sunday 23 October 2011 08:58

World leaders were today expected to sign up to a new charter, co-ordinating their economic policies to avoid future crises and delivering strong growth for the years ahead.

The G20 summit in Pittsburgh appeared to be on course to endorse parallel proposals by Gordon Brown and US President Barack Obama for strengthened international economic co-ordination.

Sources familiar with the draft communique said that it would include a new framework for governments to work together to set their objectives for the future.

Speaking ahead of today's talks, Mr Brown said that agreement on the plan was essential to avert a prolonged slump.

"Without concerted action there is a danger of years of low growth and low employment," he told Sky News.

"But with concerted action, I believe that we can have higher growth and I believe that we can get unemployment down."

The agreement is expected to establish the G20 as the "premier forum" for international economic co-operation with two summits next year - in Canada and South Korea - and annual summits thereafter.

Under Mr Brown's proposals countries would be required to submit their economic policies for review to ensure that they were moving in line with the direction set by the G20.

The summit was also expected to agree that the one trillion dollar "fiscal stimulus" package to support the flagging global economy, which was agreed by the G20 in London last April, would continue until "a durable recovery is secure".

Mr Brown said that it was essential that the tap was not turned off on the package of worldwide government support if the global economy was not to slip back into recession.

"We don't yet have a recovery. The recovery is not automatic," he said.

"The right thing to do is to maintain the situation where the world is together stimulating each of our economies so that we return to growth.

"It has got to be done, otherwise you cannot be certain we will return to growth."

The leaders were also expected to agree that the bonuses paid out by banks - blamed by many for fuelling the culture of excessive risk-taking which led to the financial crisis - should be linked to their revenues.

Mr Brown is hoping that his latest appearance on an international economic platform will give him a much-needed fillip domestically as he prepares for next week's Labour Party Conference in Brighton.

He acknowledged that the state of the economy would be a crucial issue in his forthcoming general election battle with the Conservatives, who continue to lead in the polls.

"I think what people are saying is that until they can see the results of all the action we have taken in getting the economy back to recovery, they have suspended judgment," he said.

"I accept that I have got to show people that the action that we have taken is bringing results and will bring greater results in the months to come."

The scene for today's summit was set by G20 finance ministers at a meeting in London earlier this month, at which they agreed to "continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies... until recovery is secured".

They agreed to French and German calls for work to begin on preparing co-ordinated "exit strategies" to rein back stimulus measures once the recovery is in place, but said it was too soon to start implementing them, as there were still concerns about the outlook for jobs and growth.

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