'This is the day the world came together to fight back'

Press Association
Monday 10 February 2014 16:31
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In a news conference to mark the end of the London summit, the Prime Minister said that the funding formed part of a package that would shorten the recession and save jobs.

Other measures included action to "clean up" the banks - with new rules on pay and bonuses - and measures to tackle tax havens.

"We believe that global problems require global solutions," he said.

Mr Brown said the leaders agreed a "new consensus" to do what was necessary to restore growth and jobs and to rebuild confidence and trust in the financial system.

"This is the day that the world came together to fight back against the global recession, not with words but with a plan for global recovery and reform," he said.

Mr Brown said new rules on pay and bonuses "at a global level" that reflected actual performance not failure would "encourage corporate responsibility in every part of the world".

A new "financial stability board" would "ensure co-operation across frontiers and to stop risk to the economy" and provide an early-warning mechanism, he said.

For the first time, there would be a "common global approach to how we deal with impaired, or toxic, assets".

The "unprecedented fiscal expansion" already under way would mean a five trillion dollar injection by the middle of next year, he said, helping save or create millions of jobs.

Central banks had agreed to "maintain expansionary policies as long as they are needed using the full range of options available to them".

But there would also be an additional $1trillion "made available to the world economy through the International Monetary Fund (IMF) and other institutions", he said.

That would include $250billion in IMF special drawing rights - available to all IMF members.

The Prime Minister insisted there had been no splits at the talks.

He said: "The issues that people thought divided us did not divide us at all. "There was substantial agreement on the need for us to do whatever is necessary to return to growth."

He said the increased cash for the IMF came from various countries, including 40 billion US dollars from China, 100 billion dollars from the EU and 100 billion dollars from Japan.

"Our priority right through this summit has been the jobs, the homes, the businesses of hard-working families in this country and, indeed, every country. If countries act together they can make a major difference."

Mr Brown said the IMF would monitor progress of the G20's economic package and report back on whether "further action may be necessary".

The international institutions would be reformed to make them more "effective and more representative", with senior officials appointed on merit, he told the press conference.

The Prime Minister said the summit had agreed $250 billion finance to help get trade moving again, rather than the $100 billion that had originally been suggested.

The countries had also restated their commitment to the millennium development goals and to helping tackle poverty, he added.

The summit had agreed measures totalling $50 billion to assist the poorest countries.

The Prime Minister said the trillion dollars was "new money" from the EU, China, Japan and other nations - generated through the IMF.

Trade credits were coming from private firms as well as national export credit agencies "so that we can have a boost to world trade".

"This is an example of the world actually working together; this is an example of us using international institutions to make a difference to the prospects for recovery and this is in addition to, and not an alternative to, the fiscal stimulus that is being done."

The G20 nations had agreed to meet again later this year - with the venue for the next gathering to be announced in a few days, he told reporters.

It would review the implementation and effects of today's decisions "so that we move forward as quickly as possible with the recovery of the economy.

"If we have found that more needs to be done, we will take action when we meet again."

Mr Brown said he believed people would be "surprised and pleased" at the scale of resources being made available and the united action on issues such as banking secrecy and remuneration.

Asked about protectionist measures introduced since the previous G20 summit in Washington last year, he said the World Trade Organisation had deemed any infringements of its rules "not substantial".

In a overt warning to countries tempted by protectionist measures, he said: "Members were made very much aware that action that is protectionist will be named and shamed."

"This time of financial crisis is no time to walk away from our commitment to the world's poorest," Mr Brown insisted. "We will not pass by on the other side."

Mr Brown said that after the Wall Street Crash in 1929 it took 15 years for the world to come together and address the problems.

"This time I think people will agree that it has been different," he added. "Today's decisions, of course, will not immediately solve the crisis. But we have begun the process by which it will be solved. Today the largest countries of the world have agreed a global plan for recovery and reform.

"These are not just a single collection of actions. These are collective actions, people working together at their best. We have resolved that from today we will together manage the process of globalisation."

Mr Brown dismissed suggestions that Britain might need to take advantage of the new IMF facilities. He said: "Countries have offered that they will take up the IMF facility - I think Mexico has yesterday - but we are not proposing to do so."

He predicted the summit would mark the end of international tax havens: "This is the start of the end, because country after country is now signing up for the principles that have been set forward internationally. People will increasingly see it as unsafe to be in a country that wants to declare itself a tax haven. I think this is a major step forward. It is an announcement today of a list of countries that are not abiding by the rules."

German chancellor Angela Merkel, who with French president Nicolas Sarkozy had been thought to represent a stumbling block to agreement, said today's deal was "a very, very good, almost historic compromise".

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