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G20 agrees need for united action

(China Daily)
Updated: 2008-11-10 07:05

SAO PAULO, Brazil -- The G20 group of advanced and big emerging economies agreed on Sunday on the need for coordinated action to fight the global financial crisis.

But Brazilian Finance Minister Guido Mantega told reporters at the end of a G20 annual meeting that details of coordinated action had not yet been finalized. There was no agreement on proposals to increase regulation in financial markets, he said.

Brazil holds the presidency of the G20 this year.

The Group of 20 (G20) meeting of finance ministers and central bank governors sought to lay the groundwork for the Nov 15 Washington summit on the deepening economic crisis.

World Bank President Robert Zoellick, who is part of the discussions, said a new financial framework would take time but that all countries see the need for a coordinated response to the economic troubles.

"All of us know it's a meeting at a time of historic challenge," Zoellick said. "The food and fuel crises of the recent years have now been supplemented by the blow of a financial crisis."

The calls for a broader multilateral response came despite a note of caution from Washington.

US Treasury Secretary Henry Paulson was not in Sao Paulo meeting, sending instead Treasury undersecretary David McCormick, who said only that initial talks were "very productive".

But Brazilian President Luiz Inacio Lula da Silva Sunday called for a new world financial framework to increase control over markets. The belief that markets could continue to grow without interventions has fallen like a house of cards, he said. That is why it's necessary to create new rules to guarantee greater inclusion of emerging countries.

Emerging nations accounted for 75 percent of the global economy over the past few years. Hence, economic debates must have a multilateral nature, he said.

European leaders said they hope the Sao Paulo meeting would lay the groundwork for the start of key reforms to be put in motion starting with the Nov 15 G20 summit in Washington.

International Monetary Fund (IMF) chief Dominique Strauss-Kahn warned in an interview with the Financial Times that "expectations should not be oversold" of a successor to the 1944 Bretton Woods system being agreed.

The EU has nonetheless put together its "wish list" for the summit, including tougher regulations and a stronger role for the World Bank and the IMF.

Responding to Europe's call for aggressive financial changes, the White House said on Saturday that the US and the EU share "common ground" in addressing the financial crisis.