G20 is making fresh efforts to contain eurozone contagion
The G20 is making fresh efforts to contain eurozone contagion.
The G20 leaders at Los Cabos
At the end of the G20 meet at the Mexican resort of Los Cabos, Prime Minister Manmohan Singh had plenty to write home about. The summit declaration was a ringing endorsement of the Indian stand on a range of issues - in particular Singh's assertion that investment in infrastructure was critical for sustained growth, economic recovery, poverty reduction and job creation.
"Infrastructure investment… lays the foundation for rapid growth in the longer term, while providing immediate stimulus for economies and also for the global economy, by providing a robust source of demand," argued Singh, but cautioned that this was possible only if countries can access longterm capital to fund such investment.
{quote}Singh underscored the need for eurozone nations to get their act together to overcome the crisis and give a fillip to the global economy. Austerity measures alone without growth will not help the ailing economies and prudent fiscal management by the debtridden countries must be matched by a calculated fiscal expansion by surplus nations, Singh said, clearly mounting pressure on Germany and France to take on the responsibility of stabilising the eurozone. Singh's stand found many supporters, including US President Barack Obama, German President Angela Merkel, Chinese Prime Minister Wen Jiabao and Russian President Vladimir Putin.
The summit outlined a few measures to contain the eurozone contagion with Germany, France, Spain and Italy committing to "common and enforceable" fiscal rules and a unified banking supervisory framework. According to R. Gopalan, secretary, Department of Economic Affairs, and India's chief negotiator at the summit, the concessions by the eurozone countries are the most "valuable outcome" of the meet. The Indian Prime Minister, though, admitted that recovery in Europe will be a gradual process.
India's efforts at reforming the World Bank and the International Monetary Fund also found mention in the declaration. It endorsed the IMF's reform which would give emerging countries greater voting shares. "Summit leaders have shown a commitment to take this further and with some urgency," said Gopalan.
Significantly, a Los Cabos action plan has been outlined by the leaders. It would compare the actual performance of G20 countries against policy commitments without being legally binding.
"Infrastructure investment… lays the foundation for rapid growth in the longer term, while providing immediate stimulus for economies and also for the global economy, by providing a robust source of demand," argued Singh, but cautioned that this was possible only if countries can access longterm capital to fund such investment.
{quote}Singh underscored the need for eurozone nations to get their act together to overcome the crisis and give a fillip to the global economy. Austerity measures alone without growth will not help the ailing economies and prudent fiscal management by the debtridden countries must be matched by a calculated fiscal expansion by surplus nations, Singh said, clearly mounting pressure on Germany and France to take on the responsibility of stabilising the eurozone. Singh's stand found many supporters, including US President Barack Obama, German President Angela Merkel, Chinese Prime Minister Wen Jiabao and Russian President Vladimir Putin.
The summit outlined a few measures to contain the eurozone contagion with Germany, France, Spain and Italy committing to "common and enforceable" fiscal rules and a unified banking supervisory framework. According to R. Gopalan, secretary, Department of Economic Affairs, and India's chief negotiator at the summit, the concessions by the eurozone countries are the most "valuable outcome" of the meet. The Indian Prime Minister, though, admitted that recovery in Europe will be a gradual process.
India's efforts at reforming the World Bank and the International Monetary Fund also found mention in the declaration. It endorsed the IMF's reform which would give emerging countries greater voting shares. "Summit leaders have shown a commitment to take this further and with some urgency," said Gopalan.
Significantly, a Los Cabos action plan has been outlined by the leaders. It would compare the actual performance of G20 countries against policy commitments without being legally binding.
