G-20 to give $1 trillion to IMF, World Bank

Group also agrees to renounce protectionism, pledges $250 billion in trade finance and outlines raft of policies to rebuild trust in financial system.

By JERUSALEM POST STAFF
brown obama g20 248.88 ap (photo credit: AP)
brown obama g20 248.88 ap
(photo credit: AP)
G-20 leaders pledged an additional $1 trillion to restore credit, growth and jobs in the world economy on Thursday, announcing a broad raft of measures designed to hasten the end of the global financial crisis. The leaders also declared a crackdown on tax havens, regulation of hedge funds and a new supervisory body to flag problems in the world financial system. "Today the largest countries of the world have agreed on a global plan for economic recovery and reform," said the host, British Prime Minister Gordon Brown. A sweeping G-20 communique appeared to bridge the gap between the United States and major European countries over how far to push changes on regulation to curb the market excesses that led to the current crisis. The result of the dramatic one-day gathering was swiftly praised by German Chancellor Angela Merkel and French President Nicolas Sarkozy. Sarkozy praised President Barack Obama and Brown at the end of the meeting, despite having threatened earlier to walk out if unsatisfied with the outcome. The French leader said Obama helped in creating consensus and in persuading China to agree to publish lists of tax havens. Sarkozy said Obama was a "very open man" and "completely in line with what we wanted: that politicians take their responsibilities." European and US markets surged ahead Thursday as the outcome of the summit came into view. While they did not announce any new stimulus measures - as some in the United States had hoped - Brown said the $1 trillion deal to boost funds for the International Monetary Fund, World Bank and other global institutions was unprecedented. "For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world's poorest," Brown said. "This is a collective action of people around the world working at their best." The G-20 leaders also said that developing nations - hard-hit and long complaining of marginalization - a greater say in world economic affairs. They said they would renounce protectionism and pledged $250 billion in trade finance over the next two years - a key measure to help struggling developing countries. The leaders also agreed to new rules on linking executive pay to performance, Brown said.