Thursday, April 2, 2009

G20: Priorities Still Wrong

For a one-day meeting, the G20 statement sounds pretty good...until you compare it to the Stiglitz report to the U.N. The G20 fell well short of even endorsing Stiglitz' recommendations, much less carrying them forward. Moreover, while the new $1 trillion is a junk of dough, it is about the same as the U.S. bailout so far of Wall Street fat cats...but it is to take care of the whole world's poor!

Here are some key details:

The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR [IMF special drawing rights] allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs [Multilateral Development Banks], 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....

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.

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