G20 won’t end life support to global economy
Nov. 8: The British Prime Minister, Mr Gordon Brown’s, proposal of a glo-bal financial transactions levy has found no support amongst the G20 nations.Mr Brown, who addressed G20 finance ministers at St. Andrews on Saturday, urged the G20 to investigate ways to provide a fairer balance of risks and rewards between taxpayers, citizens, shareholders and bank employees.
"It cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us. There must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards," Mr Brown said.
Achieving "a better economic and social contract between financial institutions and the public" would depend on global support, Mr Brown said and proposed measures including insurance fees for systemic risk, resolutions funds, contingent capital arrangements and global financial transactions levy.
However, the idea was shot down by the United States as its treasury secretary, Mr Timothy Geithner, told Sky News: "That’s not something that we’re prepared to support."
"This is an idea that has been around for a long time. Many countries have a lot of experience with the design of these kinds of taxes. I think, frankly, the experience has been mixed," he said.
The G20 finance ministers, including the Union finance minister, Mr Pranab Mukherjee, decided to continue the fiscal stimulus for economies until next year to ensure global recovery.
"However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured," the communiqué issued at the end of the meeting said.
However, there was no substantial progress on climate change financing. The G20 finance ministers said they will "commit to take forward further work on climate change finance, to define financing options and institutional arrangements."
They also "discussed climate change financing options and recognised the need to increase significantly and urgently the scale and predictability of finance to implement an ambitious international agreement."
The G20 finance ministers were asked to look at financing required to make a new global deal at Copenhagen work.
According to sources, the G20 acknowledged the need to increase significantly and urgently the scale of funding but failed to make any reference to the sums required, estimated to be about $160 billion a year of public financing. G20 nations failed to agree on new sources of funding for a climate deal.
AGE CORRESPONDENT
London
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