G20 must act on economy - Brown

BBC News, 26 March 2009

UK Prime Minister Gordon Brown has urged world leaders at next week's G20 summit to "take action" to reform the global banking system.

The London summit must ensure "strong growth and recovery, and particularly jobs in the world economy", he said.

He added that there must be help for the poorest countries, saying that the global downturn had pushed 100 million people into poverty.

Mr Brown was in the US, as part of a three-continent tour ahead of the G20.

Following talks with UN secretary general Ban Ki-moon in New York, Mr Brown said that at the G20 summit in London "doing nothing is no longer an option".

"We will have to take action in London to make sure that the banking system is reformed, to ensure ourselves that our financial institutions can come to the aid of the poorest countries and to make sure that we do what is necessary to ensure that there is strong growth and recovery and particularly jobs in the world economy as a result of the actions that we take," he said.

Urgent action was required to "to help the problems of the poorest", he said.

"A hundred million people have been pushed into poverty; half-a-million more children will die as a result of the failure of our system to be able to provide enough food and help and medical aid for them," Mr Brown stressed.

"We in the world community have to show the world that when there is difficulty we act.

"When there is suffering we are prepared to take the action that is necessary and when there is need we are prepared to meet it."

Co-operation

Earlier, Mr Brown said he hoped the G20 would see agreements on help for central and eastern Europe and a "continuation of a co-ordinated approach to fiscal and monetary policy" and international agreements on the supervision of the financial system.

One agreement he hoped for would be to bring in a system for highlighting publicly any instance of a country putting in place protectionist measures, which he said were the "greatest danger we face".

He added: "So I hope at the G20 summit, we will not only agree a pathway forward for world trade agreement but facilitate the expansion of trade in a world where trade is at the moment falling."

"I believe that now, for the first time, global leaders recognise the need to co-operate," Mr Brown said.

"While in each country people think and see a problem that is their country's problem, they also see that a solution to that problem doesn't just lie within their own country but lies in the international co-operation that is possible."

He said that he expected the London summit to produce "detailed results and positive decisions".

'Common rules'

A lot of the work at the G20 summit would be about agreeing "common rules by which a global economy can work".

Some progress had already been made on getting tax havens to agree to share tax information on request and there had already been "the biggest fiscal stimulus in history" and big interest rate cuts, he said.

Asked whether there was a split between Europe's focus on strengthening regulation and the US concentration on a stimulus, he said both were important.

Every country had its own timetable for announcing its fiscal and monetary policies - that was a matter for individual governments, he said.

"Nobody is suggesting that people go to the G20 meeting and put on the table the budget they are going to have for the next year," he said.

Instead he believed they needed to look at, together, what had been done in terms of fiscal stimulus, quantitative easing and interest rates, and their effects, before deciding what should happen next.

"I see a consensus, not a disagreement, on that," he said.

UK rift?

He also played down comments made by Governor of the Bank of England Mervyn King, that the government should be cautious about a further fiscal stimulus, given the high levels of UK debt.

Mr Brown has been pressing the case for wealthy countries to bring forward big fiscal stimulus packages to refloat the economy.

The prime minister said that what was at issue was whether people were prepared to do what was necessary to resume economic growth.

"If you put that question to the governor of the Bank of England he will say, as he said when he signed the G20 communique, that you have to take whatever action is necessary for growth," he said.

Shadow business secretary Ken Clarke said Mr Brown had been one of the "principal architects of the collapse of Anglo Saxon capitalism" yet appeared to want to borrow more money.

"Gordon Brown is going around the world making these most curious speeches in which he quite obviously thinks a further fiscal stimulus can be afforded by Britain and he seems to be urging everyone else to do the same thing," he said.

US President Barack Obama has said he wants a "robust" and "sustained" fiscal stimulus and has said all countries must share the burden of rescuing the global economy.

"We don't want a situation in which some countries are making extraordinary efforts and other countries aren't, with the hope that somehow the countries that are making those important steps, lift everybody up," he said in a speech in Washington DC.

But Czech Prime Minister Mirek Topolanek, who lost a "no confidence" vote in his own parliament on Tuesday, suggested the US recovery plans were the "way to hell".

After visiting the US on Wednesday, the tour will take him to Brazil and Chile.

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