World economic crisis

G20 meeting to announce funds for IMF but no stimulus

Article published on the 2009-03-14 Latest update 2009-03-14 13:23 TU

Finance ministers, central bank governors and heads of institutions at the G20 meeting
(Photo: Reuters)

A cash boost for the IMF but no new stimulus measures are expected to be announced at the G20 finance ministers' meeting in south-east England on Saturday. The meeting comes ahead of a 2 April leaders' summit in London, which willl discuss the global economic crisis.

UK Chancellor Alistair Darling, who chairs the meeting, has said that he is "quite sure" that progress would be made but there have been splits between the US and Europe, particularly on whether to launch a new economic stimulus plan.

The US favours increased public spending, feeling that leading nations should jump-start economies by pumping more money into them.

But some European countries are anxious about their large budget deficits. Instead, Germany and France favour tighter regulations regarding financial markets to help prevent a similar crisis in the future.

German Chancellor Angela Merkel on Saturday declared herself optimistic about an agreement at the London meeting.

Those who support tougher regulations for banks received a boost this week when six countries, including Switzerland, Austria and Luxembourg, said they would relax banking secrecy rules.

Looking ahead to the London meeting, Roger Alford at the London School of Economics hopes that there will be agreement on stimulus measures.

"I really expect two things," he told RFI. "A certain amount of grandstanding on bank supervision and on these tiny financial markets which are out of everybody’s control.

"But I sincerely hope that they will not spend too much time on that when, really, it is a question of domestic stimulus and that everybody should, as far as possible, stimulate in line."

Together the G20 countries represent 85 per cent of the world's economy, including major powers such as the US and Germany and emerging ones like Brazil and China.