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25 Sep, 2009 21:26

G20 to replace G8

The G20 member states have agreed that the group will replace the G8 as the main coordinating body for global financial issues. The G20 leaders are in Pittsburgh, the US for a two-day summit.

Wrapping up their two-day summit, the G20 leaders have set a global economic agenda, having agreed to continue with programs of government support in order to bring the economies back on track, to curb bonuses to bank executives and what has been the highlight of the summit – to make the G20 the main international forum for crafting international economic policy – an agreement that shows a major step in changing the global financial system.

This means the Group of Twenty will replace the Group of Eight. The move initiated by President Barack Obama was announced on Friday.

However, the G8, a smaller club that has been meeting for over 30 years, will continue to meet on matters of common importance, such as national security.

Natalya Timakova, the Russian President’s Press Secretary, says such an increase in the number of participant countries “affects the weight of each vote”. At the same time, she added, “I can’t but underline the fact that Russia is a key global player, and its position in the G20 is very important.”

It’s been decided to hold next G8 and G20 summits in Huntsville, Ontario, Canada together in late June 2010.

“The fact that the two are being held together in a single integrated time and place format means that we’ve avoided the real danger of having two competing summit clubs pulling in the opposite direction,” said John Kirton, Director at G20 research Group.

The G20 leaders seem to be a lot more positive now, since the signs of economic recovery can already be seen. However, in the draft communiqué they pledged to keep stimulus packages in place until a recovery is secured.

They’ve also reached progress on reform of the International Monetary Fund (IMF). It was proposed that the EU, which currently accounts for 40% of votes at the IMF, and the US, which has 17%, would lose some of their votes in favor of emerging states such as India, China and Russia.

Together, the G20 member countries represent some 90% of global gross national product, 80% of world trade and two-thirds of the world's population.

The twenty member-delegations are made up of the finance ministers and central bank governors of 19 countries plus the EU.