Gordon Brown on 'Economic Hurricane'

In speech to Congress, British PM pledges renewed global cooperation.

March 4, 2009— -- British Prime Minister Gordon Brown said that the world is facing "an economic hurricane" that can only be addressed by global cooperation.

"Sometimes the reality is that defining moments of history come suddenly and without warning," Brown said in an address to Congress today. "An economic hurricane has swept the world, creating a crisis of credit and of confidence."

Brown called the global recession a new priority "for our new times."

"I come now to talk of new and different battles we must fight together; to speak of a global economy in crisis and a planet imperiled," he said. "And if perhaps some once thought it beyond our power to shape global markets to meet the needs of people, we know now that is our duty; we cannot and must not stand aside."

In particular, Brown implored nations at the G20 meeting in April to agree on "standards for accountability and "transparency" to "apply to every bank, everywhere, and all the time" to bring about "an end to the excesses."

He also spoke about the need for a worldwide lowering of interest rates and a renewed international economic cooperation.

"We should seize the moment, because never before have I seen a world so willing to come together," he said. "Never before has that been more needed. And never before have the benefits of cooperation been so far reaching."

Brown said that "now more than ever, the rest of the world wants to work with [the United States]" and called the partnership between the United States and Great Britain an "unbreakable" alliance.

"Alliances can wither or be destroyed, but partnerships of purpose are indestructible. Friendships can be shaken, but our friendship is unshakeable. Treaties can be broken but our partnership is unbreakable. And I know there is no power on Earth than can drive us apart."

He said his belief that the United States and the world can educate and work their way out of the current situation "is not blind optimism or synthetic confidence to console people; it is the practical affirmation for our times of our faith in a better future."

Speaking about that future, he also called for "a historic agreement on climate change."

"I believe that you, the nation that had the vision to put a man on the moon, are also the nation with the vision to protect and preserve our planet Earth," he said. "And it is only by investing in environmental technology that we can end the dictatorship of oil, and it is only by tackling climate change that we create the millions of new green jobs we need."

Brown pledged that Britain would work tirelessly with the United States on the peace process in the Middle East and the shared goal of a two-state solution to secure a safe Israel "existing side by side with a viable Palestinian state."

"And our shared message to Iran is simple," he said. "We are ready for you to rejoin the world community. But first, you must cease your threats and suspend your nuclear program."

The 'Global New Deal'

In an exclusive interview Tuesday with "Nightline" co-anchor Terry Moran, Brown said his ambitious proposal of creating a "Global New Deal" was one among a wide range of issues he discussed at the White House during his visit with President Obama.

The two leaders discussed the global economic crisis and plans for coordinated stimulus packages around the world.

The creation of a "Global New Deal," according to Brown, amounts to governments pouring large amounts of resources into the economy, a restructuring of the financial architecture, and investment in green technologies.

Brown told Moran how his idea would affect ordinary Americans, many of whom have been critical of the proposal.

"What it means is that every country should be contributing to bringing an end to this downturn," he said. "That we've got to enlist all the energies of people in different parts of the world to deal with problems that we all face. ... America trades with other countries. If these other countries have got no money, they can't trade with America. So, you lose your exports. Everybody is affected by things that are happening in different countries and we've got to work together to solve this problem."

Brown said he's looking at how America and Europe can lead by example to better stimulate the economy, and said that he and Obama agreed on some parts of his proposal.

"I think President Obama and I agreed that, first of all, we had to do more to persuade other countries that they should do some of the things that America, Britain, and the rest of Europe have been doing," he said.

"I think we're talking about also how the banks themselves that are global -- they are international, they don't have branches just in America, they have branches all over the world -- how they can work better to serve the interests of the public," he said.

"And I think we're looking at how we can get trade moving again so that American exports can sell to the rest of the world just like British exports can sell to the rest of the world, and that means that our people have jobs as a result of that.

Obama vs. Bush: Their 'Priorities Are Really Different'

"[This] is the issue that I know concerns [Obama] most; what is happening to people throughout the country, what's happening to working families throughout the country," Brown said. "If we could act together as a world, and if we could do more working together to deal with the banking system and to deal with bringing more confidence into the economy, can we actually achieve this by international cooperation in a way that could make a difference? And I believe we can."

Brown also discussed the differences in working with Presidents Obama and George W. Bush.

"I think the priorities are really different, and that affects how people go about the job," he said. "You know, when President Bush was in the war against terror, what had happened after 2001, was such a significant force in his administration and thinking."

Historically, Bush placed a lot of value in personal relationships, something that Brown said he also sees in Obama.

"We were talking about our children," he said. "We were talking about his love of basketball, my love of tennis. And we both run quite a lot to try and keep fit."

Brown was hesitant to call today's financial challenges a depression.

"What we're going through is a deep recession," he said. "And I think that the issue before us is, can we do more than we're doing at the moment to shorten both the depth of the recession and the length of the recession."

Many economists look at the world's financial system, and say the world financial system is essentially insolvent, beyond the reach of government to save it.

Brown disagrees.

"It's not a problem that's insoluble," he said. "And I think you've got to recognize that when you have assets that are impaired, you've got to isolate them and deal with them. But where we have other assets that are not impaired, banks can keep working through them. And I think we've got to recognize that once we get the impaired assets isolated, the banking system has got to start lending again."

'Of Course I Take Responsibility'

During a joint photo opportunity with Brown in the Oval Office Obama encouraged Americans to invest in the stock market, saying stocks were so low there were potentials for good deals.

"What we're now seeing is profit and earnings ratios starting to get to the point where buying stocks is a potentially good deal, if you've got a long-term perspective on it," Obama said.

Brown, who, as former chancellor of the exchequer, in many ways ran the British economy for 10 years, declined to give any tips.

"Well, I would never go into the business when I'm either a finance minister or just advising people what stocks to buy or the timing of it," he said. "But it's clear that at some point, the markets get into a position where there are benefits to be made as well as losses.

"Of course I take responsibility for what happens in the economy," he said. "We have made big proposals of changes in the regulatory system. I think every country is now having to do this as a result of what's happened to their economy. But at the same time, we've taken very swift action -- start with recapitalizing the banking system when the system is at the point of collapse. I think we helped stop the banks' collapse in the autumn."

Brown said he looks forward to his next meeting with Obama, in London this spring at the G-20 Summit.

"[The] purpose of me being here, and then the purpose of President Obama coming to London on April the 2nd, is to work with all of the world leaders and to make sure that we're taking all of the actions that are necessary to build the confidence that the world economy now needs," he said.