G20 talks focus on backing national rescue plans

(Agencies)
Updated: 2009-03-14 20:24

BANKS KEY

Britain's Finance Minister Alistair Darling (L) and US Treasury Secretary Timothy Geithner walk to have a family photograph taken with finance ministers, central bank governors and heads of institutions during a break in the G20 Finance Ministers meeting at a hotel, near Horsham, in southern England March 14, 2009. [Agencies]

Officials speaking on condition of anonymity indicated that the meeting would skim over differences of issues such as how much governments should spend by just saying in general that all must to their utmost to support demand with fiscal stimulus.

The United States was demanding earlier this week that other governments commit two percent of GDP to such stimulus and more than they are currently doing in certain cases, but that exposed a rift with the likes of Germany and France.

"You should not expect any big numbers or any concrete demands," said one official involved in the proceedings.

France considers Washington's call a distraction from G20 pledges at a summit last November to combine stimulus with a host of reforms to rein in the excesses of banks and financial markets that led to the current crisis.

Two meeting sources also said that they expected a relatively brief G20 communique laying out a broad framework that would leave specifics for the April summit British Prime Minister Gordon Brown is billing as delivery time on last November's pledges.

World Bank chief Robert Zoellick, also attending the meeting on Saturday, said government spending would give the economy no more than a brief "sugar high" if governments failed to rid banks of toxic assets that continue to undermine confidence, trust and the desire to lend or invest.

Canadian Finance Minister Jim Flaherty said too that this was the nub of the problem now.

"Hopefully we will have an agreement on steps to be taken and I would hope some timeline about steps to be taken to isolate toxic assets in banks, that is fundamental," he said.

"There has been some delay with respect to solving it....In the US and Europe there is still work to be done."

The ministers can be expected to take some of the credit for at least one small advance in recent days.

Under mounting international pressure, Switzerland, Austria and Luxembourg offered on Friday to partly relax strict bank secrecy in some tax evasion cases.

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