G20 leaders hope support for banks, higher spending and more money for the IMF will lift the world economy out of recession by the end of 2010, according to a draft G20 communique on the Financial Times website on Sunday.
Stimulus measures already taken will raise global output by more than two percentage points and create more than 20-million jobs worldwide, the FT said, quoting from the leaked draft.
Leaders from the world’s 20 biggest economies meet in the British capital on Thursday to discuss how better regulation, help for international trade and extra spending could help end the worst recession since the 1930s.
The draft appears to contain no specific numbers on further government stimulus measures aimed at boosting demand, a key area of disagreement between Washington and some European countries.
The United States has pressed for a bigger effort from other countries but mainland Europe says it has done enough for now.
Spokespersons for Britain’s finance ministry and Prime Minister Gordon Brown refused to comment on the report. Brown’s spokesperson dismissed a draft communiqué published in a German magazine on Saturday as out-of-date.
The 24-point draft in the FT set out action to be taken on hedge funds, bankers’ pay, tax havens, currency valuation and banks’ capital reserves.
”We are determined to restore growth now, resist protectionism, and reform our markets and institutions for the future,” the draft communiqué said, according to the FT. ”We are determined to ensure that this crisis is not repeated.”
Executive pay and bonuses should reward performance, sustainable growth and avoid excessive risk, it said.
Banks must improve the quality and quantity of their capital ”over time”, but capital requirements must not be strengthened until a sustained recovery is under way, it said.
Hedge funds will be overseen by a stronger Financial Stability Forum (FSF), expanded to include all G20 states and renamed the Financial Stability Board.
Tax havens will be named in a separate document to be published at the summit and they will be subject to unspecified sanctions, the draft said.
On gold, the IMF will be asked to bring forward proposals to use proceeds from agreed gold sales to support poor countries.
The draft also signalled that G20 members should be ready to coordinate any moves away from historically low interest rates.
They are committed to ”put in place exit strategies from the necessary expansionary policies, working together to avoid unintended impacts on other”, the draft said. – Reuters