April 2nd, 2009
12:08 PM ET

Statement from the G-20 Summit

Program Note: For more on the G-20 Summit, tune in tonight as Anderson reports live from London on AC360° at 10 p.m. ET.

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2 April 2009

1. We, the Leaders of the Group of Twenty, met in London on 2 April 2009.

2. We face the greatest challenge to the world economy in modern times; a crisis which has deepened since we last met, which affects the lives of women, men, and children in every country, and which all countries must join together to resolve. A global crisis requires a global solution.

3. We start from the belief that prosperity is indivisible; that growth, to be sustained, has to be shared; and that our global plan for recovery must have at its heart the needs and jobs of hard-working families, not just in developed countries but in emerging markets and the poorest countries of the world too; and must reflect the interests, not just of today’s population, but of future generations too. We believe that the only sure foundation for sustainable globalisation and rising prosperity for all is an open world economy based on market principles, effective regulation, and strong global institutions.

4. We have today therefore pledged to do whatever is necessary to:

  • restore confidence, growth, and jobs;
  • repair the financial system to restore lending;
  • strengthen financial regulation to rebuild trust;
  • fund and reform our international financial institutions to overcome this crisis and prevent future ones;
  • promote global trade and investment and reject protectionism, to underpin prosperity; and
  • build an inclusive, green, and sustainable recovery.

By acting together to fulfill these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future.

5. The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy. Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale.

Restoring growth and jobs

6. We are undertaking an unprecedented and concerted fiscal expansion, which will save or create millions of jobs which would otherwise have been destroyed, and that will, by the end of next year, amount to $5 trillion, raise output by 4 per cent, and accelerate the transition to a green economy. We are committed to deliver the scale of sustained fiscal effort necessary to restore growth.

7. Our central banks have also taken exceptional action. Interest rates have been cut aggressively in most countries, and our central banks have pledged to maintain expansionary policies for as long as needed and to use the full range of monetary policy instruments, including unconventional instruments, consistent with price stability.

8. Our actions to restore growth cannot be effective until we restore domestic lending and international capital flows. We have provided significant and comprehensive support to our banking systems to provide liquidity, recapitalise financial institutions, and address decisively the problem of impaired assets. We are committed to take all necessary actions to restore the normal flow of credit through the financial system and ensure the soundness of systemically important institutions, implementing our policies in line with the agreed G20 framework for restoring lending and repairing the financial sector.

9. Taken together, these actions will constitute the largest fiscal and monetary stimulus and the most comprehensive support programme for the financial sector in modern times. Acting together strengthens the impact and the exceptional policy actions announced so far must be implemented without delay. Today, we have further agreed over $1 trillion of additional resources for the world economy through our international financial institutions and trade finance.

10. Last month the IMF estimated that world growth in real terms would resume and rise to over 2 percent by the end of 2010. We are confident that the actions we have agreed today, and our unshakeable commitment to work together to restore growth and jobs, while preserving long-term fiscal sustainability, will accelerate the return to trend growth. We commit today to taking whatever action is necessary to secure that outcome, and we call on the IMF to assess regularly the actions taken and the global actions required.

11. We are resolved to ensure long-term fiscal sustainability and price stability and will put in place credible exit strategies from the measures that need to be taken now to support the financial sector and restore global demand. We are convinced that by implementing our agreed policies we will limit the longer-term costs to our economies, thereby reducing the scale of the fiscal consolidation necessary over the longer term.

12. We will conduct all our economic policies cooperatively and responsibly with regard to the impact on other countries and will refrain from competitive devaluation of our currencies and promote a stable and well-functioning international monetary system. We will support, now and in the future, to candid, even-handed, and independent IMF surveillance of our economies and financial sectors, of the impact of our policies on others, and of risks facing the global economy.

Strengthening financial supervision and regulation

13. Major failures in the financial sector and in financial regulation and supervision were fundamental causes of the crisis. Confidence will not be restored until we rebuild trust in our financial system. We will take action to build a stronger, more globally consistent, supervisory and regulatory framework for the future financial sector, which will support sustainable global growth and serve the needs of business and citizens.

14. We each agree to ensure our domestic regulatory systems are strong. But we also agree to establish the much greater consistency and systematic cooperation between countries, and the framework of internationally agreed high standards, that a global financial system requires. Strengthened regulation and supervision must promote propriety, integrity and transparency; guard against risk across the financial system; dampen rather than amplify the financial and economic cycle; reduce reliance on inappropriately risky sources of financing; and discourage excessive risk-taking. Regulators and supervisors must protect consumers and investors, support market discipline, avoid adverse impacts on other countries, reduce the scope for regulatory arbitrage, support competition and dynamism, and keep pace with innovation in the marketplace.

15. To this end we are implementing the Action Plan agreed at our last meeting, as set out in the attached progress report. We have today also issued a Declaration, Strengthening the Financial System. In particular we agree:

  • to establish a new Financial Stability Board (FSB) with a strengthened mandate, as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain, and the European Commission;
  • that the FSB should collaborate with the IMF to provide early warning of macroeconomic and financial risks and the actions needed to address them;
  • to reshape our regulatory systems so that our authorities are able to identify and take account of macro-prudential risks;
  • to extend regulation and oversight to all systemically important financial institutions, instruments and markets. This will include, for the first time, systemically important hedge funds;
  • to endorse and implement the FSF’s tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms;
  • to take action, once recovery is assured, to improve the quality, quantity, and international consistency of capital in the banking system. In future, regulation must prevent excessive leverage and require buffers of resources to be built up in good times;
  • to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information;
  • to call on the accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards; and
  • to extend regulatory oversight and registration to Credit Rating Agencies to ensure they meet the international code of good practice, particularly to prevent unacceptable conflicts of interest.

16. We instruct our Finance Ministers to complete the implementation of these decisions in line with the timetable set out in the Action Plan. We have asked the FSB and the IMF to monitor progress, working with the Financial Action Taskforce and other relevant bodies, and to provide a report to the next meeting of our Finance Ministers in Scotland in November.

Strengthening our global financial institutions

17. Emerging markets and developing countries, which have been the engine of recent world growth, are also now facing challenges which are adding to the current downturn in the global economy. It is imperative for global confidence and economic recovery that capital continues to flow to them. This will require a substantial strengthening of the international financial institutions, particularly the

IMF. We have therefore agreed today to make available an additional $850 billion of resources through the global financial institutions to support growth in emerging market and developing countries by helping to finance counter-cyclical spending, bank recapitalisation, infrastructure, trade finance, balance of payments support, debt rollover, and social support. To this end:

  • we have agreed to increase the resources available to the IMF through immediate financing from members of $250 billion, subsequently incorporated into an expanded and more flexible New Arrangements to Borrow, increased by up to $500 billion, and to consider market borrowing if necessary; and
  • we support a substantial increase in lending of at least $100 billion by the Multilateral Development Banks (MDBs), including to low income countries, and ensure that all MDBs, including have the appropriate capital.

18. It is essential that these resources can be used effectively and flexibly to support growth. We welcome in this respect the progress made by the IMF with its new Flexible Credit Line (FCL) and its reformed lending and conditionality framework which will enable the IMF to ensure that its facilities address effectively the underlying causes of countries’ balance of payments financing needs, particularly the withdrawal of external capital flows to the banking and corporate sectors. We support Mexico’s decision to seek an FCL arrangement.

19. We have agreed to support a general SDR allocation which will inject $250 billion into the world economy and increase global liquidity, and urgent ratification of the Fourth Amendment.

20. In order for our financial institutions to help manage the crisis and prevent future crises we must strengthen their longer term relevance, effectiveness and legitimacy. So alongside the significant increase in resources agreed today we are determined to reform and modernise the international financial institutions to ensure they can assist members and shareholders effectively in the new challenges they face. We will reform their mandates, scope and governance to reflect changes in the world economy and the new challenges of globalisation, and that emerging and developing economies, including the poorest, must have greater voice and representation. This must be accompanied by action to increase the credibility and accountability of the institutions through better strategic oversight and decision making. To this end:

  • we commit to implementing the package of IMF quota and voice reforms agreed in April 2008 and call on the IMF to complete the next review of quotas by January 2011;
  • we agree that, alongside this, consideration should be given to greater involvement of the Fund’s Governors in providing strategic direction to the IMF and increasing its accountability;
  • we commit to implementing the World Bank reforms agreed in October 2008. We look forward to further recommendations, at the next meetings, on voice and representation reforms on an accelerated timescale, to be agreed by the 2010 Spring Meetings;
  • we agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process; and
  • building on the current reviews of the IMF and World Bank we asked the Chairman, working with the G20 Finance Ministers, to consult widely in an inclusive process and report back to the next meeting with proposals for further reforms to improve the responsiveness and adaptability of the IFIs.

21. In addition to reforming our international financial institutions for the new challenges of globalisation we agreed on the desirability of a new global consensus on the key values and principles that will promote sustainable economic activity. We support discussion on such a charter for sustainable economic activity with a view to further discussion at our next meeting. We take note of the work started in other fora in this regard and look forward to further discussion of this charter for sustainable economic activity.

Resisting protectionism and promoting global trade and investment

22. World trade growth has underpinned rising prosperity for half a century. But it is now falling for the first time in 25 years. Falling demand is exacerbated by growing protectionist pressures and a withdrawal of trade credit. Reinvigorating world trade and investment is essential for restoring global growth. We will not repeat the historic mistakes of protectionism of previous eras. To this end:

  • we reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organisation (WTO)

inconsistent measures to stimulate exports. In addition we will rectify promptly any such measures. We extend this pledge to the end of 2010;

  • we will minimise any negative impact on trade and investment of our domestic policy actions including fiscal policy and action in support of the financial sector. We will not retreat into financial protectionism,
  • we will notify promptly the WTO of any such measures and we call on the WTO, together with other international bodies, within their respective mandates, to monitor and report publicly on our adherence to these undertakings on a quarterly basis;
  • we will take, at the same time, whatever steps we can to promote and facilitate trade and investment; and
  • we will ensure availability of at least $250 billion over the next two years to support trade finance through our export credit and investment agencies and through the MDBs. We also ask our regulators to make use of available flexibility in capital requirements for trade finance.

23. We remain committed to reaching an ambitious and balanced conclusion to the Doha Development Round, which is urgently needed. This could boost the global economy by at least $150 billion per annum. To achieve this we are committed to building on the progress already made, including with regard to modalities.

24. We will give renewed focus and political attention to this critical issue in the coming period and will use our continuing work and all international meetings that are relevant to drive progress.

Ensuring a fair and sustainable recovery for all

25. We are determined not only to restore growth but to lay the foundation for a fair and sustainable world economy. We recognise that the current crisis has a disproportionate impact on the vulnerable in the poorest countries and recognise our collective responsibility to mitigate the social impact of the crisis to minimise long-lasting damage to global potential. To this end:

  • we reaffirm our historic commitment to meeting the Millennium Development Goals and to achieving our respective ODA pledges, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa;
  • the actions and decisions we have taken today will provide $50 billion to support social protection, boost trade and safeguard development in low income countries, as part of the significant increase in crisis support for these and other developing countries and emerging markets;
  • we are making available resources for social protection for the poorest countries, including through investing in long-term food security and through voluntary bilateral contributions to the World Bank’s Vulnerability Framework, including the Infrastructure Crisis Facility, and the Rapid Social Response Fund;
  • we have committed, consistent with the new income model, that additional resources from agreed sales of IMF gold will be used, together with surplus income, to provide $6 billion additional concessional and flexible finance for the poorest countries over the next 2 to 3 years. We call on the IMF to come forward with concrete proposals at the Spring Meetings;
  • we have agreed to review the flexibility of the Debt Sustainability Framework and call on the IMF and World Bank to report to the IMFC and Development Committee at the Annual Meetings; and
  • we call on the UN, working with other global institutions, to establish an effective mechanism to monitor the impact of the crisis on the poorest and most vulnerable.

26. We recognise the human dimension to the crisis. We commit to support those affected by the crisis by creating employment opportunities and through income support measures. We will build a fair and family-friendly labour market for both women and men. We therefore welcome the reports of the London Jobs Conference and the Rome Social Summit and the key principles they proposed. We will support employment by stimulating growth, investing in education and training, and through active labour market policies, focusing on the most vulnerable. We call upon the ILO, working with other relevant organisations, to assess the actions taken and those required for the future.

27. We agreed to make the best possible use of investment funded by fiscal stimulus programmes towards the goal of building a resilient, sustainable, and green recovery. We will make the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure. We encourage the MDBs to contribute fully to the achievement of this objective. We will identify and work together on further measures to build sustainable economies.

28. We reaffirm our commitment to address the threat of irreversible climate change, based on the principle of common but differentiated responsibilities, and to reach agreement at the UN Climate Change conference in Copenhagen in December 2009.

Delivering our commitments

29. We have committed ourselves to work together with urgency and determination to translate these words into action. We agreed to meet again before the end of this year to review progress on our commitments.

Filed under: 360° Radar • Economy • Global 360°
soundoff (12 Responses)
  1. earle,florida

    This grandiose moment makes no "common-sense" to the general public,except for replacing sense with,"cents" ,the only word the higher echelon could ever understand,...? Banks are fine ,finacial markets (wall street) are fine, but millions remain jobless for the forseeable future,with their homes being built on levies schrewed wih tethered tents,for shame! What was to be top priority has fallen through the cracks regarding the housing crises (forgotten by the leaders) and the middle class working stiffs!

    April 2, 2009 at 6:45 pm |
  2. Jim

    Sounds like they are setting up one world government to me.
    Funny thing is this was prophecied 2000 years ago. If they start saying to take a chip or mark so you can buy & sell DON'T DO IT! Your eternal soul hangs in the Ballance.

    April 2, 2009 at 6:17 pm |
  3. Isabel

    In time:

    It is a fact that in documents, statements, articles, people use the term "men" as the designation of human beings.

    But the first paragraph of the joint statement, which begins with the great “We face the greatest challenge to the world economy in modern times”, continue saying that the crisis still “affects the lives of women, men, and children in every country". In this manner and this sequence. I liked very much.

    April 2, 2009 at 4:45 pm |
  4. Isabel

    Yesterday I was pessimistic at the conclusion of the G-20 Summit, but the meeting had an encouraging and positive result (in my opinion).

    Meetings such as the G20, it bring several countries, different interests, conflicting points of view, produce, often empty documents, documents written only for not to counter the parties, and without not decide anything.

    This meeting was different. The scale of the crisis gave, for the participants, the exact sense of urgency.
    The heads of state took decisions. They were goals and clear in their statements and documents.

    Of course there are still many roads before the world sees this crisis over, but the heads of state meeting in London sent a message really encouraging.

    Now I hope and wish that everything is done on paper will happen.

    April 2, 2009 at 4:45 pm |
  5. ABC ~ anything but california hugh

    Officially, the G-20 Summit's main focus this year is the global economy, attempting to build consensus among nations to promote global trade and investment while resisting protectionism and strengthening all global financial institutions with greater supervision and regulation. If the Summit is a sucess the result will be a fair sustainable recovery, creating growth and jobs for all.

    Well, it sounds like a great plan, but some leaders like Sarkozy in France are already throwing water on the fire. If world leaders want to achieve their goals they have to resist the temptation to worry about public opinion, especially those crying foul at the United States for the global meltdown. If they focus mainly on their political hides the G-20 Summit will be a dismal failure. Maybe our world leaders should just stay home–saving their government millions–and just do this summit in an online chatroom.

    April 2, 2009 at 4:34 pm |
  6. Annie Kate

    Sounds good even if a bit long-winded. Proof of the pudding though is job creation – when people start getting good jobs again will show whether or not this summit actually carried through or just put a lot of nice sounding objectives down on paper. I would still like to see a limit put on countries here in America on how many jobs they can off-shore. Americans are losing their jobs to people in other countries who work cheaper and there are no jobs that really replace what is lost. We shouldn't have to accept a lower standard of living so other countries can have a higher standard.

    April 2, 2009 at 4:27 pm |
  7. Cheryl A. Hill

    When judges save corporate executives from "public shaming" by refusing release of corporate bonuses paid from taxpayer dollars,

    when car manufacturers are allowed to suppress green technology
    to preserve their market share and distribution networks,

    when an artificially created cancer industry is built up to serve one
    in three people as patients in developed countries,

    when the UN's World Health Organization's "baby friendly" hospital
    initiative is hamstrung by formula manufacturers,

    Business as usual can not be sustained.

    April 2, 2009 at 4:22 pm |
  8. Joe G. (Illinois)

    Obama was elected into office with no experience.. During the Primaries when his morals and integrity were brought to light he dismissed all red flags with the notion of irrelevance and then dimmed the lights on the subject entirely.. Now with just 60 days into office and Trillions upon Trillions of new unmanageable debt we see him again stepping upfront as a leader (Global Leader) on the basis of integrity and concerns for the well being of others. Never mind Abortion (That's no indication of morals.)

    April 2, 2009 at 3:41 pm |
  9. Lori from IL

    The statement sounds much more substanial than what was expected pre-summit. I realize it's not all going to happen overnight, but sounds like a good starting point. Hope all the individual leaders are willing to "step up to the plate" and carry out their part of the deal - only time will tell.

    Looking forward to tonight's discussion on 360.

    April 2, 2009 at 2:39 pm |
  10. Mike Holt

    It's bad enough that we have local tyrants, state tyrants, and national tyrants, now we have global tyrants. History will repeat itself once more. Will we ever learn? I'm sure they are concerned for our welfare, or are they? Remember what happened some 237 years ago? Have agendas really changed that much?

    April 2, 2009 at 2:25 pm |
  11. Amanda Walton---Fort Erie, Ontario

    hmmm... it all sounds good-but can it be done? Action speaks louder then words

    April 2, 2009 at 1:27 pm |
  12. Michael "C" Lorton, Virginia

    If you read this article---it is powerful--and how will the Group of 20 accomplish all of this when everyone is pointing "the Blame Fingers" at each other?--powerful words of the "mind"-–but not "words" of the heart--

    April 2, 2009 at 12:59 pm |