Live BlogTHE WORLD’S MAJOR nations have put together a new monitoring process that they hope will halt the types of destabilising economic imbalances that contributed to the worst global downturn since World War II.
Finance officials in the United States and other members of the Group of 20 (G20) major economies said the new program will closely follow key measurements of economic health such as government budget and trade deficits, personal savings levels and investment flows between nations.
The hope is that the monitoring process will highlight problems before they become so big that they pose a threat to global growth.
After the day-long G20 talks ended, French Finance Minister Christine Lagarde told reporters that the monitoring agreement was a significant achievement in efforts to restore confidence and prevent future financial crises:
We have made huge progress in relation to the framework for growth. This is a major step in the right direction.
Lagarde said that all G20 nations will take part in the monitoring process but in the beginning the focus would be on seven of the world’s largest economies.
US Treasury Secretary Timothy Geithner is expected to hold meetings with officials from Portugal and Greece, two nations facing serious debt troubles,
He is also expected to have meetings with officials from the European Union and Germany who have been involved in the efforts to deal with Europe’s debt problems that have badly afflicted Ireland.
The initial monitoring effort will be reviewed at an October meeting of the G20 finance officials who will report on how the process is working to G20 leaders who are scheduled to meet in Cannes, France, in November.
However, since there is no enforcement mechanism, it was unclear what pressure can be brought to bear on countries found with dangerous imbalances.
Russian Finance Minister Alexei Kudrin told reporters a key remaining question will be “whether we make the monitoring mandatory and have sanctions.”
- AP
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