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Governments warned to keep finances in order

Governments warned to keep finances in order
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G20 finance ministers say the world economy is recovering better than expected but governments need to get public finances in order.

A statement issued after the two day meeting in South Korea is designed to re-establish confidence in the markets.

The ministers from the world’s twenty biggest economies set the agenda for a full summit of G20 leaders in Toronto later this month.

The communique did not mention the eurozone’s debt troubles specifically when it was read out by the host finance minister, Yoon Jeung-Hyun.

“Recent events in southern Europe highlight the importance of sustainable public finances and the need for our countries to put in place credible and growth-friendly measures to deliver fiscal sustainability.”

The communique also effectively warned countries in particularly bad shape to act sharply.

The G20 agreed to speed up work on global banking reforms for leaders to consider at another summit later this year.

But it ditched a proposal for a global bank tax – an idea supported by the US and Europe, but opposed by Australia, Canada, and some developing nations including Brazil and India.

Ministers did agree though that the financial sector should make a “fair and substantial contribution” towards future government bailouts.

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