25 September 2009
G20 Meets as Global Economy Improves
Washington — U.S. Treasury Secretary Timothy Geithner says leaders of the Group of 20 advanced and fastest growing economies are meeting for the third time in less than a year as the first signs of a global economic recovery are beginning to appear.
“The broad consensus of private economists and businesses [is] that we’re beginning to see growth in the United States, and around the world we see exports rising and forecasts for growth are being revised upwards,” Geithner said at a press briefing September 24 in Pittsburgh, the site of the G20 summit.
“I can say with confidence based on my discussions with finance ministers and central bank governors from around the world, there is a common, shared commitment to make sure we’re working together to sustain these early signs of recovery and growth,” he added.
The G20 leaders have gathered for a two-day summit to address efforts to rein in compensation for bank and securities executives, strengthen international financial regulations, and build a more balanced global economy. The Pittsburgh Summit is the third meeting of the leaders in less than a year.
The group met in November 2008 as the economic recession was worsening, then held a similar summit in London in April at a time when the global economy seemed to be crashing in the worst economic recession since the 1930s.
President Obama initiated a sweeping change to make the G20 the premier forum for international economic cooperation, supplanting the older Group of Eight major economies – Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.
“President Obama called on the world’s leaders to reform global economic institutions to meet the needs of an interconnected global economy,” a White House fact sheet issued September 24 said.
G20 leaders began meeting September 24 following a day of significant announcements, meetings and changes at the U.N. General Assembly in New York. The summit ends September 25 after two sessions and a press conference.
The G20 finance ministers and central bank governors met September 4–5 in London in preparation for the Pittsburgh Summit.
The G20 was formed in 1999 and includes 19 of the world’s largest national economies and the European Union. The G20 countries represent about 90 percent of the gross national product globally and nearly 80 percent of world trade. They also represent two-thirds of the world’s population.
A proposed measure carrying wide support calls for G20 nations to rebalance the global economy, which requires debt-heavy nations like the United States to encourage greater savings and rely less on consumer spending to pull it out of recession, while encouraging export-rich nations such as China to shrink their surpluses.
“We’ve been working to build consensus on what we call a new framework for balanced growth — for more sustainable and balanced growth,” Geithner said. “And we’ve seen very broad support for that proposal.”
G20 members are going to make sure their economies are less vulnerable to future cycles of boom and bust, and that national financial systems are more stable and that they grow at a more sustainable and rapid pace in the future, he said.
Enhancing the international regulatory process will help ensure that banks and major securities firms avoid the risky ventures and debt accumulation that contributed directly to the current recession, he said.
“We are not going to walk away from the greatest economic crisis since the Great Depression and leave unchanged, and leave in place, the tragic vulnerabilities that caused this crisis,” Geithner said. “If we continue to allow risk and leverage to migrate where standards are weakest, the entire U.S.-global financial system will be less stable in the future.”
The G20 leaders are expected to reach agreement on key priorities for reform in strengthening capital requirements for banks, providing adequate oversight for derivatives markets and hedge funds, and making sure there are better tools for responding to future financial crises, Geithner said.
Geithner warned that the G20 leaders must not let nations say the worst is over and business can return to normal without further financial reforms. “If you listen carefully to what countries are saying, there is very substantial commitment really to try to move quickly and put in place stronger reforms,” he said.
The G20 is comprised of Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
A transcript of the Geithner briefing is available on America.gov.
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