LONDON — G20 leaders pledged an additional US$1 trillion Thursday to restore credit, growth and jobs around the world, an agreement Prime Minister Stephen Harper hailed as an “unprecedented” consensus plan that will buoy confidence in the global economy.
The agreement, which includes a crackdown on tax havens, regulation of hedge funds and a new supervisory body to flag problems in the world financial system, is “very complete” and “very strong,” Harper said during his closing news conference.
“This really is unprecedented, co-ordinated and fast action by the international community to an economic crisis, frankly at a speed and a level of engagement we have never seen in the past,” Harper said.
“This is quite a significant achievement, and I do believe markets should take considerable comfort from this action. Obviously we’re not out of the woods, but there is a very strong will on the part of all major nations to act on this and to co-ordinate those actions.”
Canada’s specific contributions include another US$10 billion for emergency International Monetary Fund assistance, and is putting $200 million into the trade fund.
Harper said that while the global recession is deeper than it was in November, there’s still a lot of stability in the system and that an economic recovery is inevitable — the only question remains just when it will materialize.
During his own news conference, British Prime Minister Gordon Brown called the agreement the “day the world came together to fight back against the recession.”
“Today the largest countries of the world have agreed on a global plan for economic recovery and reform,” said Brown, who served as host of the summit.
Brown said credit agencies will be regulated to end conflicts of interest, tax havens will be forced to disclose their banking details and a new Financial Stability Board will be created to provide an “early warning mechanism that the global economy needs.”
Finance Minister Jim Flaherty said in a statement that ensuring “the international flow of capital and strengthening international trade are critical to bringing the world out of a global economic crisis.”