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G-20 Seeks Elusive Recession Cure

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The New York Times

Published: March 15, 2009

HORSHAM, England - Divided over the best way to fight the economic downturn, finance officials of the leading industrial nations agreed Saturday to commit more money to help developing countries, step up efforts to revive bank lending and regulate hedge funds.

But the ministers of the so-called Group of 20 nations stopped short of announcing any details, a signal that beneath the pledges of cooperation, a trans-Atlantic rift remained over whether government intervention should emphasize more regulation or stimulus spending.

The meeting was a precursor to the coming G-20 summit meeting April 2 in London, where the leaders of the major industrial powers and big developing countries will gather in an attempt to reach agreement on how to stem the global economic tailspin.

Germany and France were the only two countries to give a joint news conference after the meeting, in which they reiterated their position that the focus of the G-20 meeting in London next month should be on reforming regulation rather than additional stimulus measures.

The U.S. Treasury secretary, Timothy Geithner, took pains Saturday to present a united front, saying that the world was committed to increasing consumer demand - despite stated European reluctance on that matter.

The dispute between the United States and continental Europe highlights a continuing gap on a range of economic and strategic issues, including matters like sharing the burden of fighting the war in Afghanistan.

WHAT THEY DID

•Agreed to oversight on hedge funds - largely unregulated investment funds whose financial clout has grown enormously.

•Agreed to oversight and registration of credit rating agencies, clearer accounting rules for problem assets and more standards for credit derivatives, another lightly regulated area that has raised fears of large losses.

•Committed to fighting protectionism and pledged to help emerging and developing economies cope with the loss of international capital.

•Agreed that International Monetary Fund governance needs to reflect the changed economy and the role of developing countries.

The Associated Press

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