G20 meeting to mull euro crisis

08:49, June 03, 2010      

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Finance ministers from the world's biggest economies will meet in South Korea this week in an attempt to shore up a global recovery threatened by the eurozone debt crisis.

Ministers and central bank chiefs from the Group of 20 will assess the world's economic health and discuss ways to achieve sustainable and balanced growth, according to South Korean officials.

The meeting tomorrow and Saturday in the southern city of Busan will help prepare for a G20 summit in Toronto from June 26-27, featuring the top developed and developing nations.

The talks are overshadowed by the European debt crisis, which has roiled world stock and financial markets and sent the euro plunging.

The G20 is the premier global economic forum, with members accounting for 90 percent of the world's gross national product and 80 percent of world trade.

Some are skeptical as to whether the G20 can accomplish anything regarding Europe's economic problems, according to the Associated Press.

Stephen Lewis, a senior economist at London-based Monument Securities, said the key problem for nations using the euro is that they are hamstrung by the inflexibility imposed by the single currency.

"But G20 finance ministers cannot afford to recognize this, mindful as they must be of the potentially destabilizing influence, not only in Europe but in the rest of the world, of any widespread loss of confidence in the euro arrangements," he said. "Their discussions are, therefore, likely to lead nowhere."

Also on the agenda will be ways to recoup taxpayer-funded bailouts and secure funds to brace for future turbulence.

A bank levy is supported by European powers and the US, but resisted by some develop-ing nations plus Canada and Australia - who argue that they didn't create the fiscal mess and shouldn't have to pick up the tab to clear it up.

"Canada is, and will remain, opposed to a tax that would penalize financial institutions that remained strong and prosperous while many of the world's banks failed," Canada's industry minister, Tony Clement, said last month.

Instead, Australian Finance Minister Wayne Swan said Wednesday that he would be touting the potential benefits of the country's controversial new mining tax at the summit.

"I would imagine that when I run into a few of them (finance ministers) at the weekend, that there will be a bit of a discussion about this matter (the tax), which will be initiated by them," Swan said.

Talks on the bank levy are continuing, South Korea's finance minister, Yoon Jeung- Hyun, told reporters Tuesday, "I expect the talks to be concluded at the November summit in Seoul."

Source: Global Times


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