Page last updated at 15:39 GMT, Sunday, 29 March 2009 16:39 UK

Leaders stress need for G20 unity

Australia's Kevin Rudd said the crisis needed a global solution

Key politicians from around the world have underlined the need for unity in addressing the world economic crisis when leaders meet at the G20 summit.

Talking on the BBC's Andrew Marr show, Australian Prime Minister Kevin Rudd said the G20 alone had the global economic reach to address the crisis.

UK Foreign Secretary David Miliband said the event was a unique process and not just about "warm words".

But he rejected the idea that the meeting could set new national budgets.

There has been scepticism about what new plans will come out of the G20 summit, which takes place on 2 April in London, beyond measures that have already been announced to boost national economies.

UK Treasury Chief Secretary Yvette Cooper played down hopes that there would be a big new economic stimulus package agreed at the summit.

"What we are not going to have is a process in which finance ministers are writing their budgets in the course of next week. That was never the process that you go through," she told the BBC.

The governor of Bank of England, Mervyn King, recently warned against any further big increases in the UK government deficit.

'Exceptional crisis'

Russia's President Dimitri Medvedev told the BBC the challenge would be how to find an adequate solution to the global problem, which was severely impacting on his country with 6 million unemployed.

G20 LONDON SUMMIT
G20 march in London
World leaders will meet next week in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

And China's ambassador to London, Fu Ying, said "Leaders might not be able fix all problems in one day but it will be an important process to tackle the global crisis."

Mr Miliband said there would be more concrete details about the future funding and role of the IMF and World Bank.

He said it was crucial that the event effectively involved the whole world.

"This is about tackling an exceptional economic crisis far beyond the financial system".

Financial sector reform, macro economic coordination and trade were all issues that needed to be addressed, he said.

Mr Rudd said "Only the G20 has the global economic reach to provide the response necessary to begin to mend this global economic recession and support the restoration of jobs around the world."

Earlier US billionaire George Soros told the BBC the G20 meeting was "make or break" for the world economy.

"Unless they do something for the developing world there will be serious collapse in that part of the world," Mr Soros said.

Cheques

There have been questions over how much growth in developing nations such as China will be able to offset the slowdown elsewhere.

Ms Fu highlighted that Beijing, which has already set out one major fiscal stimulus package worth $586bn, was running its largest deficit in 20 years.

"People should remember that China indeed is still a developing country."

She said the financial crisis was not so much hitting China's banks, as the ordinary people and workers, as export firms were being shut down.

In recent days there has been much coverage of calls from China to look the role of the dollar as the global reserve currency. China holds the highest amount of of dollar foreign currency reserves worldwide.

Ms Fu said such concerns were not not new but part of a long standing debate. She added that given the nature of the global crisis it was normal to consider such issues.

She also said there was much misunderstanding about the reserves since these belonged to the Chinese people so the government could not simply "write a cheque".

'Draft'

Separately a report in the Financial Times said a draft communique from G20 leaders reiterated pledges to avoid protectionism among others.

"We are determined to restore growth now, resist protectionism, and reform our markets and institutions for the future," the draft said, according to the FT.

It also said world stimulus plans under way would create more than 20 million jobs.

The FT said said hedge funds would be overseen by "a stronger Financial Stability Forum", and tax havens would be singled out.



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