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15 Mar, 2009 09:41

Consensus at G20 Finance Minister meeting shaky?

Finance ministers from the world's top 20 economies have pledged to take ‘whatever action is necessary’ to tackle the global credit slump.

At a meeting in the south of England they attempted to play down any major differences as they laid the groundwork for further discussions to take place in two weeks at the G20 meeting in London.

The cloud of the global economic downturn has cast its shadow on the pastoral surroundings of Horsham, England, where finance ministers got together with central bankers from the G20 group to try and find a path to a brighter future.

The agenda was packed: the macroeconomic response to the global crisis, regulation and cooperation, and the reform of global financial institutions.

One of the main outcomes was the commitment to guard against protectionism.

“We have taken decisive and comprehensive action to boost demand and jobs, and we are prepared to take any action that is necessary,” said UK Chancellor Alistair Darling. “In addition we have committed ourselves to fighting all forms of protectionism and maintain open trade and investment.”

Another area of consensus was the need to substantially increase the IMF’s resources to strengthen its ability to help developing nations facing funding crises. The G20 nations had also agreed to ask the IMF to assess the impact of different fiscal stimulus plans to help decide what further action was necessary.

However, disagreement on what exactly is required next is still an issue.

The meeting came just a day after the Financial Times published a leaked memo from Britain’s Foreign Office which stated that lobbying efforts should be focused on 11 ‘priority’ countries.

It described Russia among several others as being ‘Tier Two countries’ and advised relatively less attention being paid to their representatives at the meeting.

Russia’s finance minister Aleksey Kudrin said the outcome for Russia is just the opposite:

“We have strengthened our influence on the development of global guidelines, that is global guidelines will not be considered without Russia,” he said. “Russia participates in four corresponding workgroups within the G20.”

The finance ministers have done their best to play down talk of any disagreement at this meeting. They have underlined that there has been a significant amount of progress and a great deal of consensus. Exactly how much consensus has been reached will become apparent in a fortnight when the world leaders gather for the G20 summit in London.