Source: Xinhua

04-01-2009 08:59

Special Report:   Global Financial Crisis
Special Report:   G20 Summit in London

by Fu Yunwei

BEIJING, March 31 (Xinhua) -- On the eve of the G20 summit slated for Thursday in London, major developed and developing countries have come up with a host of proposals for tackling the current financial crisis and economic downturn.

At the summit, participating leaders are expected to seek agreement on what fiscal and monetary measures should be adopted to restore growth, what regulatory changes are needed to make to the financial system, and how to reform such international organizations as the International Monetary Fund (IMF) and the World Bank.

While the two major economies in the G20 bloc, the U.S. and the European Union (EU) share consensus over the above issues, they differ over which goes first and how to implement the measures.

The U.S. is eager to put economic stimulus measures on the top agenda of the summit, fearing being slow in action would risk further economic slumps. U.S. Secretary of Treasurer Timothy Geithner recently called on other countries to commit two percent of their GDP to extra spending to stimulate growth.

The EU, on the other hand, holds a much cooler stance, saying there is no need for new fiscal stimulus measures. Instead, it proposes strengthening fiscal surveillance, reforming the international financial system, and establishing a more efficient surveillance system.

The two economic powers also differ over the amount of funding needed to replenish IMF resources. The U.S. favors a trebling of the existing 250-billion-U.S.-dollar fund the IMF has now at its disposal to support struggling economies, indicating the U.S. could contribute up to 100 billion dollars.