Obama, G-20 unite on recovery package
LONDON -- President Obama and other leaders of the world's financial powers have rallied around a sweeping economic recovery package that will inject $1.1 trillion into the global economy in hopes of reversing the worst recession in more than half a century.
The landmark agreement reached Thursday by the Group of 20 was more than what experts expected, given differences over government spending and regulation that had divided them. It includes a crackdown on tax havens, hedge funds and executive pay.
The Dow Jones Industrial Average surged 2.8% on the news. Even so, the deal may not be enough.
"I think the patient is stabilized," Obama told 800 journalists who waited to hear his opinion three hours after the conference ended. "There's still wounds that have to heal, and there's still emergencies that could arise."
The consensus agreement pleased leaders who had come here deeply divided on some points.
"This is the day the world came together," British Prime Minister Gordon Brown said.
French President Nicolas Sarkozy, who had threatened to walk out if tough new regulations were not imposed on financial institutions, called it "redefining capitalism."
The agreement issues guidelines for how executives should be paid and will lead to a published list of countries that do not comply with new rules for corporate tax havens.
The infusion of cash will come in the form of loans to developing nations and financing for trade deals. The economic crisis has crippled world trade and had its most devastating impact on poor countries, from Africa to Eastern Europe.
There were no new pledges of government spending on top of nearly $5 trillion already committed over two years. The White House had lowered expectations for such a result before the summit.
"These summits are all about managing expectations, and going into this week the expectations were very low," said Edward Alden of the Council on Foreign Relations. "The goal here was to show a united front, and they did that."
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