Horsham, England Finance officials from rich and developing countries pledged Saturday to do “whatever is necessary” to fix the global economy, including supervision of freewheeling hedge funds and restoring bank lending by dealing with the shaky securities burdening their finances.
But officials remained cool to a U.S. push for more coordinated government spending to stimulate economies.
They called instead on the International Monetary Fund to assess the individual government actions already taken and what more might be required, rather than laying out definite plans to ramp up spending.
Finance ministers and central bankers from the Group of 20, which accounts for more than 80 percent of the world economy, agreed there was an “urgent need” for a big boost to the lending resources of the International Monetary Fund to help struggling governments in the developing world.
They left the specific amount and who would contribute open, to be taken up at the much-anticipated summit of the group’s national leaders in London on April 2. The job of Saturday’s meeting was to shape the agenda for that gathering, which will be closely watched for whether leaders can find common steps to take.
“We’re prepared to take whatever action is necessary to ensure growth is restored and we’re committed to do that for however long it takes to do that,” said British Treasury chief Alistair Darling.
In Washington, President Barack Obama downplayed reports of divisions between the United States and Europe on the stimulus, and all the key players were keen to present a united front on Saturday.
Obama said the notion that the U.S. and Europe are already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, was a “phony debate.”
“I can’t be clearer in saying that there are no sides,” Obama said.
Financial regulation “is front and center” among the issues he wants to deal with, he said.
“In my mind, at least, there is no conflict or contradiction between the positions of the G-20 countries and how we’re going to be moving forward,” Obama said, adding that differences in details were being worked out. “I expect to have a productive meeting.”
U.S. Treasury Secretary Timothy Geithner, who had pushed for Europe to match Washington’s $787 billion package of spending and tax cuts, said there was “broad consensus globally on the need to act aggressively to restore growth to the global economy.”
Geithner said he was pleased with progress made at the talks on Friday and Saturday, but noted that the world economic and financial crisis was still playing out. “This is a very challenging period and this is still evolving,” he told reporters.