Economic recovery, climate change tops G20 meeting (1st Lead)

Nov 7, 2009, 10:50 GMT

St Andrews, Scotland - Finance ministers from the world's 20 leading economies were meeting Saturday in the Scottish golf resort of St Andrews in a bid to reinforce signs of a tentative recovery that have emerged in the global eoncomy.

But coming in the buildup to the Copenhagen global climate summit in December, the meeting of the group of 20 finance ministers and central bankers in St Andrews will also consider steps for financing measures to help emerging economies to tackle climate change.

As the meeting got underway, British Prime Gordon Brown called on the bloc to consider imposing a tax on financial transactions to make banks more accountable.

'There have been proposals for an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global transaction levy,' Brown said.

'I do not in any way underestimate the enormous and difficult practical and technical issues that will need to be overcome that a globally cohesive system requires and raises, he said. 'But I do not think these issues should prevent us from considering with urgency the legitimate issues I have discussed.'

Saturday's G20 meeting came just one day after talks in the Spanish city of Barcelona aimed at paving the way for next month's climate change summit ended after failing to reach agreement on a series of contentious issues.

Opening the G20 summit, Britain's Chancellor of the Exchequor Alistair Darling said it was imperative to make real progress on the question of climate change.

'I am perfectly well aware that round this table there are different views, there are arguments that we need to have ... and some tough negotiating,' he said.

'It really is important that we as finance ministers are engaged in this, because if there isn't an agreement on finance ... then the Copenhagen agreement is going to be much, much more difficult,' he said.

The St Andrews' meeting represents the third time that the G20 finance ministers have met this year and follows a summit of the group's leaders in September.

At their September meeting in the US steel town of Pittsburgh, the G20 leaders agreed that the bloc of advanced and emerging countries will permanently replace the long-standing Group of Seven as the main body to discuss economic issues.

Together, the G20 member states represent about 85 per cent of global economic activity.

Moreover, since the G20 met earlier this year signs have emerged that the world economy is starting to shake off what has been the deepest recession in about six decades.

This has meant that the G20's focus has started to shift from moves to contain the global economic crisis to considering steps to shoring up the so far fragile recovery.

Germany, France, US and Japan, which have already emerged from recession, are keen to start discussing moves to wind back the massive stimulus plans they rolled out to counter the downturn but which have resulted in rising public debt levels.

However, nations such as Britain, which is hosting the meeting and is still stuck in recession is reluctant to begin consdering a timetable drive to withdraw the anti-crisis stimulus packages.

That said, the ministers and their central bank chiefs appear to agree that a sustainable recovery has still not taken shape and that the stimulus measures need to remain in place for the time being.

   The St Andrews meeting is also expected to hammer out details of a global framework for growth agreed in Pittsburgh, designed to forge international coordinated action to head off the threat of new economic crises.

In addition, to the world's leading developed nations such as the US, Germany, Japan, Canada and France, the G20 includes the key emerging economies such as Argentina, Brazil, India, Indonesia, Mexico, Russia and China.

   Meanwhile, there were clashes outside the G20 summit venue between police and demonstrators who have called for the creation of a 'people's G20.'