8 Nov 2009

G20 believes global recovery too weak to end stimulus

2:47 pm on 8 November 2009

Finance ministers from the world's leading economies have ended their summit in Scotland, saying the global economic recovery is too weak to end government stimulus policies.

A statement issued after the G20 meeting of rich and developing nations says the recovery is "uneven" and remains dependent on support, while unemployment is a "major" concern.

The meeting was held at St Andrews to discuss entrenching global recovery and avoid a repeat of the credit crunch.

There was little enthusiasm for British Prime Minister Gordon Brown's proposed transaction tax to fund any future bank bailouts, the BBC reports.

The United States said it would "not support" the tax and Canada added it was "not an idea we would look at". France and Germany are said to support the levy.

The communique agreed avoids complacency. Although the ministers believe economic and financial conditions have improved, they decided they still need to keep up the initiatives intended to restore growth.

The meeting was overshadowed by a statement from Mr Brown, suggesting a tax on financial transactions as one of a number of options for making banks pay for the crisis.

Mr Brown told the conference it is not acceptable that the benefits of banking success are reaped by the few, while the costs of failure are borne by everyone.

However, he says Britain will not act alone, and any new tax on banking will have to be a global agreement.

His calls have been received politely by the finance ministers, but the BBC reports several made remarks which suggest other ways of tackling the problem are rather more likely to be adopted.

The G20 has already asked the International Monetary Fund to look at the options for making banks share the costs of the problems caused by the financial crisis.

The G20 countries also promised to step up efforts to tackle climate change and "work towards an ambitious outcome" at the United Nations conference in Copenhagen in December.