World Leaders Meet in London on Global Economic Recession

By Sonja Pace
London
02 April 2009

British PM Gordon Brown (front center), speaks with Brazil's President Luiz Inacio Lula da Silva during photo session at G20 Summit in London, 02 Apr 2009

Leaders of the G20, the world's major economies are meeting in London to hammer out some agreement and coordinated effort to stem the global recession and find a way back to growth.  

Some of the world's most powerful leaders, along with their finance chiefs are meeting at London's ExCel Center to try to forge common ground on tackling the world's economic crisis.

What they are hoping to do is to come up with a coordinated plan to ease the recession, get their economies back on track and put in place regulatory measures to try to prevent similar crises in future.

Indications are there will be no agreement on more stimulus packages, general agreement on free trade and against protectionism, agreement on more money for the International Monetary Fund, and there is likely to be some agreement on greater regulation.

Economist Gianluca Benigno of the London School of Economics says cracking down on tax havens should not be an immediate concern.

"If you want to find a scapegoat you can, but that is not the main issue on which you want to focus. If you want to focus on that for populist reasons, that is another matter," he said.

There is a good deal of popular anger at bankers and traders who are widely seen as having taken too many risks with other people's money and at the wealthy, who stand accused of using tax havens to shelter their money. So, cracking down on them is generally popular. But many economists say the bigger issues to worry about include bad bank debt and lack of liquidity.  

US President Barack Obama speaks with British PM Gordon Brown during G20 Summit at Excel centre in London, 02 Apr 2009

The United States and Britain wanted to see other governments plow more funds into their economies as stimulus. But, strong opposition came from many countries, especially Germany and France in fear of increasing the debt burden. Most European nations instead want tougher regulation on the banking and finance sectors.

Analysts say that even if the G20 leaders do not agree on all points, it is crucial that they send a message to the public and to jittery markets that they understand the gravity of the crisis and that they are committed to working together to try to resolve it.