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G20-What's on the Table?

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G20 Pittsburgh summit:
what’s on the table

Pittsburgh G20 summit
As the leaders of the world’s richest nations gather
in the American Rust Belt city, these are the key
points on the agenda.

By Harry Underwood FIRST POSTED SEPTEMBER 24, 2009

The last time the G20 met, in London, the goal was nothing less than saving the global economy. Now, with Japan and continental Europe both heading tentatively out of recession, and the US and Britain expected to shortly follow suit, the world's 19 leading economies, and the EU, are trying to negotiate a strategy which will mean the crisis is never repeated. Here is what they will be discussing in Pittsburgh, at the first major world event hosted by Barack Obama.

At the London summit, leaders agreed to pump money into their economies in order to boost global business during the downturn. Today, with deficits soaring and fears of inflation in the long term growing, they need to decide how long this should continue. Some nations, such as Japan, France and Germany, want to cut down on public spending in response to private sector growth. Others though, including Britain, are worried by unemployment and want to keep ploughing money into their economies.

A serious imbalance had developed between countries with huge national debt, such as Britain and the US, and those like Germany and China, which have been more cautious, and have large reserves of cash. The G20 will try to persuade the debtors to cut down on their government spending, and the savers to spend more. China, which has a lot of money in dollars, will be especially eager for the US to take steps which will safeguard the value of their currency.

The logic behind curbing bankers' bonuses is that by not allowing traders to profit personally from making a quick buck, the markets will become less volatile. Chancellor Alistair Darling, talking to the BBC before flying out to Pittsburgh, warned bakers that the party was over and they must realise the world has changed. He wants a limit on bonuses and new rules to allow banks to claw back bonuses if fortunes change. A G20 agreement on how to limit bonuses will be hard to achieve, with France and Germany demanding much tougher measures than the US and Britain, whatever Darling may say. France's latest proposal is for a "limit on the bonuses as a percentage of activity".

The plans to reform the International Monetary Fund, and give greater voting rights to emerging economies such as Brazil, India, Russia and South Africa, are a sensitive matter. America plans to shift five per cent of voting power from rich nations, but Europe has yet to agree to this proposal, and the emerging economies want a seven per cent shift.

While discussions on climate change aren't a formal part of the G20 meeting, it's a subject which is likely to be discussed following this week's UN meeting and in the run-up to December's international climate treaty talks in Copenhagen. After both China and Japan made commitments at the UN, it is hoped Obama will make a firm pledge to update the Kyoto protocol.

Source: This article is posted by The First Post, UK

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