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G20 seeks deal on imbalances, unsure of success

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G20 seeks deal on imbalances, unsure of success

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French Economy Minister Christine Lagarde has said that it will not be a drama if finance ministers and central bankers from the world’s 20 biggest developed and developing economies fail to reach an agreement this week on guidelines to measure global economic imbalances.

Under discussion is an EU plan to identify those imbalances using an agreed set of economic indicators and then analyse their causes and possibly make policy recommendations on how to deal with them.

G20 finance ministers and central bankers are due to hold a summit in Paris at the end of the week.

Such imbalances, reflected in the current account balance, private and public savings, debt and capital flows, can trigger or augment crises, destabilising the world economy. G20 leaders agreed in November to find a way to tackle them.

Lagarde added that there was also “a long debate on whether to include the trade balance with its flows of products and whether to include flows of services.”

Bank of France Governor Christian Noyer said that the debate was not intended to be an exercise in point fingers at countries with large deficits.