World leaders promised Saturday to do whatever was needed to protect the global financial system from collapsing under the weight of a massive economic downturn that erupted with implosion of the American housing market. Leaders from nearly two dozen countries also endorsed a series of broad goals to fend off future economic calamities and to revive the world economy. “We must lay the foundation for reform to help ensure that a global crisis, such as this one, does not happen again,” the leaders said in a joint communique issued Saturday after the conclusion of the two-day emergency economic summit. Officials at the extraordinary Group of 20 summit in the US capital called for intensified government efforts to bolster national economies, cooperation on international regulation of the financial system and reform of global structures to aid needy developing countries. Among other things, leaders agreed to reform international financial institutions such as the World Bank and the International Monetary Fund to help developing countries weather the economic storm. The final communique listed six steps world leaders agreed to take immediately: u Continue “vigorous efforts and take whatever further actions are necessary to stabilize the financial system.” u “Recognize the importance of monetary policy support, as deemed appropriate to domestic conditions.” u “Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate...” u Help “emerging and developing economies gain access to finance in current difficult financial conditions... .We stress the International Monetary Fund's important role in crisis response...” u “Encourage the World Bank and other multilateral development banks to use their full capacity” in support of developing nations. u “Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.” The world leaders also said they would work toward an April meeting in Europe, with financial officials charged with completing five major task that could revolutionize global economic and financial relations: u Strengthen transparency and accountability u Enhance sound regulation u Promote integrity in financial markets u Reinforce international cooperation u Reform international financial institutions “We are committed to taking rapid action to implement these principles,” the world leaders said. “We instruct our finance ministers...to initiate processes and a timeline to do so... prior to March 31, 2009.” The summit participants were: the United States, Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Spain and Turkey. Other than Spain, those countries – plus the European Union – make up the Group of 20 industrialized and developing economies, or G-20. The group accounts for roughly 90 percent of the global gross domestic product, which measures the value of goods and services produced worldwide. President George W. Bush emerged from the meetings Saturday, declaring that the United States could have gone into a downward economic spiral worse than the 1930s Great Depression without steps already taken in the US. Bush said the world's top economies will also take “a fresh look at rules that govern market manipulation and fraud.” French President Nicolas Sarkozy said Europe showed “complete unity” in its approach to the summit, which he called “historic” because so many countries with diverse interests came together and agreed action plan. The French leader, current head of the European Union, also said the US had accepted the need for agreement on registering financial rating agencies, a move that Washington had refused to accept in the past. British Prime Minister Gordon Brown joined in Sarkozy's assessment. “Today's G-20 meeting is historic. We have reached important conclusions today about trade, about financial stability and about the expansion of our economies,” British Premier Gordon Brown said. Chancellor Angela Merkelexpressed confidence the meeting would produce results. “I think we took important steps toward global economic order, toward global regulation of business and global market oversight... . I am therefore extraordinarily satisfied with the conclusion of the meeting,” she said. President-elect Barack Obama stayed away from the meeting, but designated former Secretary of State Madeleine Albright and former Rep. Jim Leach to represent him in meetings with leaders on the sidelines.
