G-20 Drafts Blueprint for Economic Repair

Nov. 15, 2008 -- Usually when 20 world leaders gather in one place, the scene runs more to style than substance. A lot of posturing and photo ops, but not much tough negotiating.

Things are different at this weekend's G-20 summit. The prime ministers and presidents of the rich industrialized countries and developing countries with emerging markets have gathered in an emergency summit to hash out a plan to get the world's financial markets back on track and prevent future global economic meltdowns.

After a working dinner last night at the White House and a long morning of meetings today, the group released a long, detailed action plan for how to move forward. In short the leaders promised to:

Speaking after the meetings today, President George W. Bush sought to drive home the need to weather the storm without jeopardizing free market principles. "We recognize that, on the one hand, there's been a severe credit crisis, and on the other hand, our economies are being hit very hard," Bush said. "And so there was a common understanding that all of us should promote pro-growth economic policy."

Bush has found himself having to defend free-market fundamentals amid a crisis that many leaders, in particular in France and Germany, have blamed on a U.S. financial system allowed to run amok without proper regulation and oversight.

Simon Johnson is a senior economist with the Peterson Institute in Washington and the former chief economist at the International Monetary Fund. He says the Europeans wanted an event where they could "come together and wag their fingers at the U.S. to some degree, where they could show leadership in terms of what needs to be done going forward."

As if to punctuate that, the G-20 took a hard line against individual financial institutions for their role in creating the global economic meltdown. The statement reads, "Financial institutions must also bear their responsibility for the turmoil and should do their part to overcome it including by recognizing losses, improving disclosure and strengthening their governance and risk-management practices."