G20 strikes trillion-dollar crisis plan
LONDON (Reuters) – World leaders agreed a trillion-dollar deal on Thursday to combat the deepest economic downturn since the Great Depression.
At a G20 summit, they also signed off on plans to commission blacklists of tax havens and tighten financial rules to bring hedge funds and credit rating agencies under closer supervision.
"This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable," British Prime Minister Gordon Brown, the summit host, said.
World markets reacted positively. The index of top European shares was up 5 percent after Japan’s Nikkei gained 4.4 percent. On Wall Street, the Nasdaq was up 4 percent and the Dow Jones 3.6 percent.
Brown said that while there were "no quick fixes", the decisions meant that "we can shorten the recession and we can save jobs."
French President Nicolas Sarkozy said the results were beyond what could have been imagined.
Addressing a key demand from France and Germany, Brown said the leaders agreed "there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end."
He said leaders agreed to commit new resources of 1 trillion dollars that are available to the world economy through the International Monetary Fund and other institutions.
This included 250 billion dollars of IMF reserve units called Special Drawing Rights. "This is available to all IMF members," Brown said. In addition, the IMF would see its own resources tripled, with up to $500 billion of new funds.
The G20 also agreed a trade finance package worth $250 billion over two years to support global trade flows.