G-20 Pact Has New Rules and $1.1 Trillion for Loans and Trade

[steven johnson]

Source: New York Times

Struggling to bridge deep divides over how to revive a paralyzed global economy, the leaders of the world's largest economies agreed Thursday to bail out developing countries, stimulate world trade and regulate financial firms more stringently. But President Obama conceded that there were "no guarantees" that those measures would reverse the biggest global downturn in six decades.
Prime Minister Gordon Brown of Britain, host of the Group of 20 summit meeting called to fight the crisis, announced at its conclusion that the leaders had committed to $1.1 trillion in new funds that would greatly increase the capital available to the International Monetary Fund. The goal would be a revival in trade, which is expected to contract this year for the first time in 30 years.
The proposed remedies, some critics said, treat some peripheral effects of the crisis rather than its thorniest causes. On the critical question of how to grapple with trillions of dollars in "toxic assets" clotting the financial system in Europe and the United States, there was a declaration of goals but few specific actions.
Still, the meeting eased fears that leaders would repeat the failure of a similar gathering in 1933, which was followed by a surge of protectionism that prolonged the Great Depression. It also gave Mr. Obama a high-profile debut on the world stage. He projected contrition about America's role in starting the meltdown, extolled global resolve to find a way to end the downturn and mediated a dispute between the presidents of France and China over tax havens.


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