|
 The meeting of finance ministers and central bankers in Istanbul
comes as Greece casts a new shadow over Europe, cheap oil plays
havoc with inflation and growth forecasts and a strengthening dollar
threatens emerging economies.
Deputy Prime Minister Ali Babacan said Turkey - G20 chair for 2015 -
preferred to set binding national investment targets but it appeared
to be struggling to win support.
"Would all international countries be committed? ... We don't know
yet," Babacan said in a speech on Monday.
One G20 source told Reuters the idea had already been taken off the
table.
U.S. Treasury Secretary Jack Lew said last week the United States
could not be "the sole engine of growth" and a senior U.S. official
said Washington's message would again be that Europe is not doing
enough.
Germany, with its hefty current account surplus and a balanced
budget, has come under pressure at successive G20 meetings to spend
more.
Berlin has rejected that suggestion in the past and is likely to
argue that its rising domestic demand and plans to increase
investment, largely through the private sector, shows it is doing
what it can, according to European sources familiar with the G20
agenda.
Its euro zone peers France and Italy have urged more investment in
the struggling single currency bloc.
"We need to be bolder in Europe in terms of risk taking ... I hope
that policy action will indeed facilitate stronger private sector
investments, especially infrastructure investments," Italian Economy
Minister Pier Carlo Padoan told a financial gathering in Istanbul
ahead of the G20 meeting.
Leaders of the world's top 20 economies agreed measures last year to
raise their collective gross domestic product growth by an
additional 2 percentage points over the next five years above the
level projected in 2013.
The pledge, called the Brisbane Action Plan, entails about 1,000
commitments, which are now likely to be slimmed down to a more
manageable number for each country to deliver on.
"Keep your word, or explain," was how Babacan explained the
strategy.
Coming good on those pledges could add more than $2 trillion to the
global economy and create millions of new jobs over the next four
years, International Monetary Fund chief Christine Lagarde said in a
blog post.
GREEK SHADOW
The new Greek government's refusal to extend an EU/IMF bailout and
instead seek a new deal that ends austerity and restructures its
debt will cast a long shadow at the Istanbul meeting.
Many of the main euro zone protagonists are here and the world is
watching.
"There has to be compromise. It's clear that Greece has got to be
prepared to make some changes, and I think a wholesale repudiation
of their debt is not on the cards," Canadian Finance Minister Joe
Oliver told Reuters in an interview. "But other countries, creditors
will have to work with Greece to arrive at a compromise.
[to top of second column] |
"I don't think anybody wants Greece to leave the currency union."
The G20 put together a stimulus package that pulled the world back
from the brink in 2009 but today's challenge is more delicate, with
diverging monetary policies a cause of global turbulence.
The U.S. Federal Reserve looks set to raise interest rates this
year, a stark contrast to huge money printing programs by the
European Central Bank and Bank of Japan and impromptu rate cuts from
India to Australia, Canada to Denmark. China's giant economy is also
slowing.
A by-product of that is the dollar being driven higher while other
major currencies tumble.
Lew said he saw no signs of active currency manipulation and
officials from other G20 countries do not expect Washington to
complain while its economy is growing robustly.
Italy's Padoan said lower oil prices and the anticipated impact of
an ECB plan to buy around a trillion euros of government bonds had
helped improve the economic picture and would push the euro to a
more "consistent" level.
REFORM FATIGUE
The Organisation for Economic Cooperation and Development said
structural reforms had slowed over the past two years.
G20 nations must focus on higher labor productivity and become more
competitive and innovative if they want to boost growth, the OECD
said in a report prepared for the meeting.
Bank of England Governor Mark Carney urged the G20 to mount a "big
push" to implement global regulatory reforms, fearing that
governments may be tiring of non-stop rule-making since the
financial crisis six years ago.
Carney was speaking as head of the Financial Stability Board which,
since Lehman Brothers crashed in September 2008, has coordinated a
raft of new banking and markets rules to make the financial system
more resilient.
(This version of the story has been refiled to amend dateline)
(Additional reporting by Nick Tattersall, Ece Toksabay, Gernot
Heller, Jan Strupczewski and Randall Palmer in Istanbul.; Writing by
Mike Peacock, Editing by Nick Tattersall)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
