G-20 countries support measures to bolster world economy

The Group of 20 rich and developing countries have pledged to carry on with measures to boost the global economy, despite signs of a fledging recovery.

At the end of a meeting here Saturday, G-20 finance officials also promised a crackdown on bankers' pay and committed to giving developing countries a greater say in international financial regulation.

A joint communique says that fiscal and monetary policies will stay "expansionary" for as long as needed to reduce the chances of a double-dip recession after the worst financial crisis since World War II.

There is also an agreement to impose tighter control on bankers' pay. But officials have been forced to compromise after Britain and the U.S. deemed French and German calls for a cap on bonuses unworkable.

Addressing finance officials at the start of their talks here, British Prime Minister Gordon Brown warned against "complacency or overconfidence" in the face of mounting signs of at least a modest economic upturn.

Japan, Germany, France and Australia all recording growth in the second quarter. Britain is widely expected to do so in the third quarter.

"We meet at a critical juncture for co-operation in the global economy," Brown told officials from countries representing 80% of the world's output. "The G-20 needs to agree a clear and unambiguous mandate for the G-20 to give priority to the resumption of global growth and to help countries achieve sustainable growth going forward."

Taking the unusual step of pulling rank on his Treasury chief Alistair Darling, the host of the London meeting, Brown also stressed the need for reform of the banking system to restrict bonus payments and called for sanctions against tax havens to be put in place early next year.

The timing of a so-called exit strategy from the recent massive economic stimulus to drag the world economy out of recession is not yet agreed upon.

Germany has pushed for G-20 nations to start talking about when and how they will withdraw stimulus measures, but others have warned that withdrawing the massive amounts of money injected into the ailing world economy any time soon could risk a double-dip recession.

"Given the risks we face, this is not the time for economic complacency or overconfidence, the stakes are simply too high to get these judgments wrong," said Brown. "To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgment be a serious mistake."

There has also been a difference in emphasis for the London meeting, which began with a working dinner on Friday, as European countries push for a crackdown on bankers' bonuses, while the U.S. has stressed the need to boost bank reserves to prevent a repeat of the financial crisis.

Developing countries, meanwhile, used the gathering Friday to press for reform of global financial governance, proposing shifts in voting power at the International Monetary Fund and the World Bank in favor of developing countries.

Brown expressed broad support for all those measures, saying they were necessary to underpin recovery of the world economy.

Brown also called on G-20 nations to toughen action against tax havens and "commit to what sanctions we are going to take and implement by March next year."

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