“A turning point” for the world economy” and “the fight- back starts here” – these were some of the positive messages from leaders of the world’s richest nations at the end if their London summit.
A whole raft of actions were agreed to tackle the worst global downturn in decades, with measures worth a massive 750 billion euros. The majority will go to the International Monetary Fund to help struggling economies. Britain’s Prime Minister Gordon Brown declared: “This is the day the world came together to fight back against the global recession. Not with words, but with a plan for global recovery and reform.” Fears that the gathering would be divisive and deliver nothing appear to have been ill-founded; even the threat of a French president walkout failed to materialise. In fact France’s President, Nicolas Sarkozy, was surprised at how much progress was achieved at the meeting. “Honestly, we would never have believed that we would have got an agreement so far-reaching,” he said. “This is not a victory of one camp over another, one vision over another. It’s the whole world waking up to the fact that the world has to change.” It was the promise of tougher financial regulations that got Paris and Berlin on board. The combined action plan aims to boost world output by four percent by the end of next year. Duncan Green, Oxfam’s head of research, was more critical. “At this moment of crisis everybody’s spending huge amounts of money on their fiscal stimulus,” he said. “This could be a moment when they actually say, we can’t run the economy in the same way. We’ve got to run it on a fraction of the carbon emissions and it actually needs huge government investment.” Markets reacted positively to the IMF funding deal, but missing were specifics on how banks will unload those dreaded toxic assets.