The G20 agreed an economic recovery package of more than $1 trillion and new regulations for financial institutions
World leaders agreed on a $1.1 trillion injection of financial aid into the global economy, when they met last month in London, with Gordon Brown, the British Prime Minister, who claimed that the grand bargain he had brokered represented “a coming together of the world” which would speed recovery from the worst recession since 1945.
The sprawling deal, set out over two days of negotiations in the British capital, contains tougher-than-expected measures to tighten financial regulation, including a clampdown on tax havens, the final part of the deal to be struck, after an impassioned call for compromise by the U.S President Barrack Obama.
The American President said that “the patient had stabilized and was in good care”, claiming that, by any measure, the London summit was historic.
“It was historic because of the size and the scope of the challenge that we face and because of the timeliness and the magnitude of our response,” highlighted Obama.
The transatlantic compromise between America and Europe led to a jump in shares in London and New York. The FTSE index closed up more than 4 percent at 4,124.97. The deal won praise from business leaders, as well as anti-poverty campaigners, but dismayed the green lobby with its lack of measures to combat climate change.
British government officials lost their battle to include a commitment to spend a substantial share of the economic stimulus on low-carbon recovery projects. Also, some critics pointed out that the summit failed to produce a coordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.
The London Summit took place at a time when the world confronts the worst economic crisis since the Second World War.
Building on the outcome of the Washington Summit held in November 2008, the aims of the London Summit were to bring together leaders of the World’s major economies and key international institutions to take the collective action necessary to stabilize the world economy and secure recovery and jobs.
The President of Russia Dmitry Medvedev described the outcome of the London summit as a step in the right direction. According to Medvedev, the summit communiqué contains major decisions on financial support from various states, measures to be taken by international financial institutions, decisions about the future of these same financial institutions, stabilization of the markets of G20 countries, protectionism, and on individual states’ responsibility for their macroeconomic policies.
The summit was attended by 30 delegations representing 22 countries that account for 80 percent of global GDP, in addition to eight major international financial and economic organisations.
On the other hand, thousands of protesters from a large range of groups including anti-capitalists, environmental activists and those angry at the global economic downturn gathered in advance of the G20 Summit, took to the London’s streets for “Financial Fools Day”, asking for an end to the system of corporate greed causing poverty and destroying the planet.