The G20 Summit saw the so-called BRICS emerging economies – that is Brazil, Russia, India, China and South Africa – agreeing to commit 100 billion dollars (76 billion euros) to a currency reserve pool.
That comes amid the currency turmoil some of them are suffering from the prospect of the United States central bank soon reducing the stimulus dollars that have been flooding into the world economy.
Euronews correspondent at the summit James Franey said: “Four years ago the G20 leaders stood united in fighting the economic crisis, today they are cautiously optimistic about the prospects for a global recovery, but there is still no agreement on how to deal with the potential aftershocks ahead of the US Federal Reserve’s planned exit from its stimulus programme.”
India, which has suffered most, is the keenest backer of the currency reserve pool idea, to try and defend against a balance of payments crisis, but it will be next year at the earliest before it is finalised, and economists say it is not big enough, compared to the trillions traded in foreign exchange daily.
The European Commissioner President Jose Manuel Barroso told euronews that what is really needed is reform of those countries economies: “We would like the emerging markets to keep their growth as close as possible to their growth potential. In fact, now they are recognising that there are some problems – and it is different across countries – that they have also to address. Because growth in the emerging markets has been, and I hope it will continue to be, a driver for global growth.”
Those emerging economies enjoyed rapid growth thanks in part to a flood of cheap dollars, now those days are over and at the G20 even China and Russia said vulnerable countries, including India, will need to take steps to rebalance their economies.
In other words, they are not in the business of bailouts for countries that are in trouble.
China and Russia both run external surpluses and chided India for failing to tackle a yawning current account deficit that has exposed the rupee to a brutal selloff amid a broader flight to the US dollar.
Indian Prime Minister Manmohan Singh did get some support from Japan, as the two countries said they would expand a bilateral
currency swap facility to $50 billion (38 billion euros) from $15 billion (11.4 billion euros), strengthening the rupee’s defences.
Copyright © 2014 euronewsMore about:
- 1Spanish unemployment falls again, but economic outlook is dimmer
- 2The nightmare continues for Tesco
- 3Boeing sells aviation material to Iran for first time since 1979
- 4Hungarian internet tax proposal angers net users and providers
- 5Who passed? Financial world braces for eurozone bank stress test results
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Now is ‘right time’ for Catalonia independence vote, says Mas | euronews, world news
- 3Vatican rocked by another paedophilia scandal | euronews, world news
- 4Two container ships collide on Egypt’s Suez Canal | euronews, no comment
- 5British Muslims’ message to ISIL: Not in my name! | euronews, world news
- 6Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 7Sweden becomes first European nation to recognise Palestine | euronews, world news
- 8European Union News | euronews: latest breaking news and headlines about European Union
- 9How nasheeds became the soundtrack of jihad | euronews, world news
- 10International tv news | euronews: European and International tv news bulletin
- 11Iceland volcano ‘pollutes Paris’ | euronews, world news
- 12Ebola: Six new suspected cases in Spain | euronews, world news
- 13Learning through “serious games” | euronews, learning world
- 14All you need to know about the Ebola virus | euronews, world news
- 15International breaking news | euronews online world breaking news in video
- 16US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 17US delivers technical aid to Ukraine but warns over security | euronews, world news
- 18euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
- 19Global warming to ‘cause 250,000 extra deaths a year’ | euronews, world news
- 20Mike Tyson: ‘You learn humbleness when you get older in life’ | euronews, the global conversation
Wires > Business
- 19:35 CET Areva-Siemens raises claim to $4.4 billion over Finnish reactor…
- 18:14 CET Deutsche Bank lawyer found dead in New York
- 12:02 CET Russian government approves law to clamp down on offshore tax…
- 12:00 CET Greybull Capital buys UK’s Monarch
- 11:31 CET Deutsche Bank lawyer found dead in apparent NY suicide – WSJ
- 10:11 CET Areva-Siemens raises claim to $4.4 billion over Finnish reactor…
- 08:48 CET India’s finance minister favours interest rate cut – paper
- 08:34 CET China’s auto market growth may halve to 7 percent this year -…