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G20 ministers to firm up global recovery, climate funding

by Staff Writers
St Andrews, Scotland (AFP) Nov 6, 2009
G20 finance ministers were meeting here on Friday to shore up recovery from the global financial crisis and thrash out funding for a still uncertain agreement on climate change.

The ministers from the world's 20 biggest and fastest emerging economies are holding their third in a series of ministerial meetings this year that have helped launch a one-trillion-dollar fiscal stimulus package to tackle the slump.

Over two days in the picturesque Scottish coastal town of St Andrews, they are seeking to flesh out agreements made at a leaders' summit in Pittsburgh in September.

Now that the United States, Japan, Germany and France have emerged from recession after last year's credit crunch, the G20's focus has switched from disaster management to building a secure economic future.

British finance minister Alistair Darling said ahead of the meeting that ministers agreed it was too early to withdraw massive economic support packages while the global recovery remained fragile.

"At the G20 (in Pittsburgh), we agreed that it would be a real mistake to withdraw the stimulus packages before their work was done," he said in an interview with European newspapers.

Despite the signs of recovery, coordinated action was still required, Darling added, as Britain remains stuck in its longest recession on record.

"If we do not act, there is a risk that we will be confronted by a decade of weak growth and low employment," he added.

The St Andrews meeting will work out details of a global framework for growth agreed in Pittsburgh, designed to prevent fresh meltdown through coordinated international action.

Meanwhile, France says it wants to see genuine signs of progress on curbs on bankers' bonuses after the leaders agreed in Pittsburgh to move towards a system of spreading them over a longer period with the possibility of clawing back payments if they under-perform.

Finance Minister Christine Lagarde told BBC radio: "I would hope that a little bit more can be done, to actually cast in stone the fact that we want to stop excesses, stop abuses, and bonuses that are strictly risk incentives."

Bonus policies have been blamed by many observers for fuelling last year's instability in financial markets, amid claims they encourage excessive risk-taking.

With just weeks to go before a UN conference in Copenhagen on finding a new agreement on curbing greenhouse gases, the ministers will also look at how rich countries can financially assist developing nations in tackling the problem.

Talks in Barcelona designed to lay the groundwork for the December 7-18 talks ended Friday, leaving a host of bitterly divisive issues still to be hammered out.

But amid signs that prospects for a hoped-for binding deal in Copenhagen are fading, Darling urged ministers to make progress on the financial details of an agreement.

He said: "We either take action and stop those problems happening or we fail to take action and we face bigger costs down the line.

"My message to my fellow finance ministers is there's a job of work to be done here. I don't think anyone seriously denies there's a problem here. Let's get on with it."

Environmental group WWF said the St Andrews meeting would be a failure unless it agreed a figure of 160 billion dollars a year to finance emissions reduction.

It argued that such a deal would put next month's talks on the right track.

"While a binding deal on a new protocol may not now be possible, we believe a binding political deal is still a realistic prospect.

"And it needs to be a deal that mentions figures for finance and targets for emissions," said WWF Scotland's Richard Dixon.

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