Nov 7, 2009, 17:12 GMT
St Andrews, Scotland - Finance ministers from the world's 20 leading economies agreed Saturday to bolster the global recovery with stimulus measures, but stopped short of forging new climate change financing plans.
The meeting in the Scottish golf resort of St Andrews also came amid renewed calls for a tax on financial transactions to ensure banks face up to their responsibilities in future global economic crises.
In their communique, the G20 finance ministers warned about the threat posed by escalating unemployment and saying it was not time to wind back the massive anti-crisis stimulus plans governments have rolled out to counter the downturn.
'If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,' said US Treasury Secretary Timothy Geithner following the meeting.
While saying that 'economic and financial conditions have improved' the finance ministers said in their communique 'recovery is uneven and remains dependent on policy support.'
As a result, they agreed 'to maintain support for the recovery until it is assured.'
The finance ministers also backed the introduction of mutual assessments of their economies that could result in countries forging national and regional policy frameworks by the end of January.
However, the meeting failed to draw up a list of concrete options for helping to finance emerging economies tackle global warming, even though the meeting comes amid the buildup to the Copenhagen global climate summit in December.
Instead, the finance ministers said they would 'work toward an ambitious outcome in Copenhagen'.
'We have not reached a common solution,' said German Finance Minister Wolfgang Schaeuble, who added the Copenhagen summit cannot fail.
Earlier in the day, British Prime Minister Gordon Brown urged the G20 finance ministers to consider introducing a financial transaction levy, which could generate funds to help pay for possible financial sector bailouts.
'It cannot be acceptable that the benefits of success in this sector are reaped by the few, but the costs of its failure are borne by all of us,' Brown told the meeting.
Facing a tough election next year, the British leader stepped up his criticism of the banks, telling the G20 financial officials that a new social contract was needed between the public and the banks.
In urging the G20 finance officials to consider a levy on financial transactions, Brown joins other European nations who have raised plans for introducing similar measures.
Washington, however, remains opposed to launching a transaction tax.
But to be effective, Brown insisted that such a levy would have to be introduced on a worldwide basis.
The St Andrews' meeting was the third time the G20 finance ministers have met this year. It follows a summit of the group's leaders in September.
At their September meeting, in the US 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.
While Germany, France, the United States and Japan have already emerged from recession, Britain remains stuck in an economic downturn. Other G20 nations missed out on slumping into recession altogether.
In addition, to the world's leading developed nations such as the US, Germany, Japan, Canada and France, the G20 includes 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.'
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