World financial crisis

G20 leaders agree action plan, new meeting next April

Article published on the 2008-11-16 Latest update 2008-11-16 16:53 TU

Goodbye from him - Bush speaks after the summit
(Photo: Reuters)

The leaders ot the G20 top economies agreed an action plan to try and fight economic crisis at a summit in Washington on Saturday. Government spending plans and tax changes are planned to boost growth but the US is reported to have blocked moves to set up a global financial controller.

The final agreement said that countries will use "fiscal measures to stimulate domestic demand to rapid effect" but there is no plan to co-ordinate such action.

British Prime Minister Gordon Brown, who had proposed such a move, said he believed there will be "significant further announcements" of tax and spending plans in the next few weeks.

The G20 leaders say that their finance ministers will draw up a series of recommendations by 31 March to bring to another summit in April. French President Nicolas Sarkozy proposed that meeting should take place in London, because the UK will be chairing the G20 then.

Six areas are to be targeted:

* Regulating parts of the financial markets which triggered the crisis;

* Boosting transparency;

* Limiting payouts to industry bosses;

* Evaluating global accounting norms;

* Financing international financial institutions;

* Drawing up a list of financial institutions whose collapse would imperil the world financial system.

But the meeting did not create a global financial market controlling body, as proposed by some European and emerging countries but opposed by the US.

Outgoing US President George Bush called for reform of the World Bank and the International Monetary Fund before bidding an emphatic "goodbye" at the end of his post-summit press conference.

Barack Obama will have taken his place by the time of the April summit.

IMF chief Dominique Strauss-Kahn welcomed the action plan, declaring that "a new world economic order is developing that is more dynamic and more inclusive than we have yet seen".

He welcomed promises to boost IMF resources, notably Japan's offer of 100 billion dollars (79 billion euros) to support loans to crisis-hit countries.

The summit failed to prevent a plunge in stocks in the Gulf on Sunday.