Tough action pledged at ‘Bretton Woods Two’
World leaders have pledged coordinated action to restore growth, transparency and accountability to global financial markets.
A communiqué adopted at an emergency G20 summit in Washington said finance ministers would work towards detailed economic reform on a country-by-country basis.
But global leaders failed to agree on a coordinate stimulus plan following George Bush’s warning against protectionism.
Speaking as the five-page communiqué, which pledges to reform the World Bank and the International Monetary Fund, was released, the outgoing US president said: “We are adapting our financial systems to the realities of the 21st century.”
The communiqué itself insisted that the G20 was laying the foundations to ensure a global crisis as experienced in the past months was never encountered again.
The Brazilian delegation meanwhile said a new agreement on global free trade was close.
Mr Bush and Gordon Brown had earlier warned that global leaders faced ‘tough decisions’ at this weekend’s G20 summit in Washington.
Nineteen world leaders from the G20 group had been discussing the global changes necessary to ‘rebuild’ global economy and instigate fundamental reforms to financial systems.
The Washington conference seeks to create a common understanding of the causes of the crisis – and what actions need to be taken to prevent another occurring in the future.
Speaking earlier Mr Bush said: “One of the dangers during a crisis such as this is people will start implementing protectionist policies.
“There’s some progress being made, but there’s still a lot more work to be done.”
Mr Brown said the summit would involve “tough… difficult” negotiations.
“I think it is obviously important to make decisions today about what can be done.
“There are a lot of countries with their own interests and their own policy directions at the moment that will have to change,” the prime minister said.
“I believe we are making progress.”
“There are a lot of countries with their own interests and their own policy directions at the moment that will have to change.”
Nations hope that the summit will quicken ongoing volatility on the financial markets around the world and update the financial structure before the world falls into complete global recession.
The crisis is still far from being solved, however. Jonathan Eyal of the Royal United Services Institute warned that progress “is not as impressive as it looks on the eve of the summit.”
The G20, also known as Bretton Woods after the 1944 meeting that established the post-second world war financial system, will have many powerful players in attendance.
But no country has the authority to shape its final conclusions. And the man who perhaps would have the biggest influence on proceedings, US president-elect Barack Obama, will not be present at the meeting, his staff have confirmed.
The countries involved hope G20 will act as a stepping stone to multiple future meetings to pinpoint and address all aspects of the crisis.
Limited progress would not necessarily mean complete failure, however. French president Nicolas Sarkozy is keen on the idea of a second meeting in 100 days’ time.
