Page last updated at 18:58 GMT, Saturday, 14 March 2009

G20 make pledge to restore growth

Tim Geitner says there is a broad global consensus.

Finance ministers from the G20 group of rich and emerging nations have pledged to make a "sustained effort" to pull the world economy out of recession.

"We are committed to deliver the scale of sustained effort necessary to restore growth," they said in a joint statement after their talks in the UK.

UK Chancellor Alistair Darling said they agreed the International Monetary Fund (IMF) should be given more money.

The talks were held amid reports of rifts over the best way forward.

BBC economics editor Stephanie Flanders said that the outline agreements represented "cheap talk", and differences remain.

The outline agreements will now provide the basis for more concrete pledges at next month's meeting of G20 leaders in London.

'Decisive action'

Speaking after the gathering of finance ministers in Horsham, West Sussex, Mr Darling, said the G20 recognised the "sense of emergency" surrounding the world economy.

"We have taken decisive and comprehensive action to boost demand and jobs," he said.

Stephanie Flanders
Agreeing to an absolute standstill on all trade and capital barriers would have meant something
BBC economics editor Stephanie Flanders

"We are prepared to take whatever action is necessary."

The outline agreements released in the joint communique include a commitment to fighting all forms of protectionism, and the restoration of bank lending.

The finance ministers have also pledged to continue with economic stimulus packages and low interest rates, and to increase IMF funding.

Our correspondent said the key two agreements were the pledge to increase the funds to the IMF, and the commitment to guard against protectionism.

"Agreeing to an absolute standstill on all trade and capital barriers - so that countries could not raise tariffs or other constraints from their current levels, even where permitted under WTO [World Trade Organisation] rules - would have meant something."

'Consensus'

While the US and UK finance ministers have led the call for further public spending on stimulus packages to help lift economies, some of their European counterparts have urged caution.

KEY G20 AGREEMENTS
Commitment to "fight all forms of protectionism and maintain open trade and investment"
A key commitment to restoring bank lending
Sustained stimulus packages to provide "vital support for growth and jobs". To be monitored by the IMF
Maintaining low interest rates
Commitment to helping developing nations
Increase in funding to the IMF

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Led by Germany's Peer Steinbruck, they are concerned about all the billions being added to governments' debt, and have said it would be best to see if the current stimulus schemes start to work before more money is dedicated.

Following the meeting, both Mr Darling and US Treasury Secretary Tim Geithner played down talk of any disagreement at the talks.

Mr Darling said there had been a "significant amount of progress, a great deal of consensus".

Mr Geithner added that "we have a very broad consensus globally on the need to act aggressively to restore growth to the global economy".

Yet Mr Steinbrueck again indicated that Germany was concerned about the expense of further stimulus packages.

"Public debt is a heavy burden for our children and grandchildren and there will have to be an exit strategy," he said.

At a separate meeting on Saturday, UK Prime Minister held talks with German Chancellor Angela Merkel.

Both said they were confident that concrete agreement could be reached at next month's meeting of G20 leaders in London.



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