Global recovery moving faster than expected, says G20

Posted on Saturday, April 24, 2010

The global economy is emerging faster than expected from the deep recession, finance ministers from the world's leading economies, the G20, have said.

After talks in Washington, they said the pace of the recovery was largely due to the huge amounts of government money pumped into national economies.

US Treasury Secretary Timothy Geithner said he welcomed the greater sense of urgency being shown over Greece.

The country has asked for an EU-IMF bailout of its debt-ridden economy.

Greece's finance minister is due to take part in IMF talks on Saturday.

Earlier this month, a deal was agreed under which eurozone nations would make available to Greece emergency loans of up to 30bn euros ($40bn; £26bn) in the first year, with a further 10bn euros coming from the IMF (International Monetary Fund).

'Different speeds'

In Washington, G20 finance ministers said government efforts to jump-start recovery were paying off.

The G20 says efforts to jump-start recovery were paying off

"The global recovery has progressed better than previously anticipated largely due to the G20's unprecedented and concerted policy effort," the statement said.

But it stressed that the process was happening "at different speeds within and across regions".

"We recognise that in such circumstance different policy responses are needed."

Timothy Geithner spoke of "decisive and coordinated measures at home and across the G20", which means, he said, that "the world economy is growing and the financial system is healing".

The G20 statement added that members should develop credible strategies for reducing stimulus spending and to allow ultra-low interest rates to rise to more normal levels.

The finance ministers also asked the IMF to analyse in detail a proposal to levy taxes on big banks and other financial institutions to stem risk and pay for possible financial failures.

The statement said that such measures would look at "how the financial sector could make a fair and substantial contribution towards paying for any burdens associated with government interventions to repair the banking system".

Greek crisis

Although the statement did not mention what was the most pressing threat to global financial stability, Greece did loom large in G20 discussions, the BBC's economics correspondent Andrew Walker in Washington reports.

Greek firemen were among a wave of public servants who took to the streets

Mr Geithner called for Greece, the IMF and the EU to move quickly to produce a package of strong economic reforms and financial support.

Canadian Finance Minister Jim Flaherty said the G20 was concerned and was monitoring the situation closely.

"It is of course a source of concern to us and we will continue to closely monitor the situation," he said.

Mr Flaherty added that Greece had undermined the confidence of the financial markets and should come up with a credible programme to fix the government finances.

Athens had hoped that just the promise of EU support, agreed last month, would be enough to reassure markets and help its recovery.

But Greece's problems have continued to hit investor confidence in the euro and other European economies.

On Friday evening, several thousand protesters took to the streets of Athens to demonstrate against further austerity measures.