Finance ministers from the world's top economies have warned of the serious risk that a UK split from the EU poses to the global economy. They've vowed to use all the tools at their disposal to spur growth.
Group of 20 finance ministers meeting in Shanghai on Saturday said the global economic recovery "remains uneven and falls short of our ambition for strong, sustainable and balanced growth."
In a G20 communique, policymakers listed specific "risks and vulnerabilities" that could harm global economic prospects, including the shock of a possible UK exit from the European Union.
British Finance Minister George Osborne said finance ministers were unanimous that a so-called "Brexit" was one of the "biggest economic dangers this year."
Britain will vote in a referendum on June 23 on whether to leave the 28-nation EU. A G20 official said the risk of a Brexit hadn't been mentioned in earlier drafts of the communique, but had been added after a strong case for was made for its inclusion by British delegates.
Italian Finance Minister Pier Carlo Padoan said there was no doubt a decision by Britain to leave the EU would have negative global consequences.
"We would classify a UK exit from the EU as a powerful geopolitical shock, a negative shock," Padoan told reporters in Shanghai.
Refugee crisis and geopolitical tensions
Other major risks named in the G20 communique included the arrival of an increasing number of refugees in some regions, volatile capital flows, a large drop in commodity prices and escalated geopolitical tensions.
G20 ministers and central bank chiefs said they would use "all policy tools" available to "individually and collectively" boost sluggish growth and foster economic confidence.
There was, however, no mention of a plan for any specific coordinated stimulus spending to spark activity, as some investors had been hoping. Divisions between major economies over the best method to turn around slowing growth also emerged during the two-day meeting. Germany's finance minister, Wolfgang Schäuble, made it clear he didn't support a new joint stimulus effort, and said the debt-financed growth model had reached its limits.
"It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy," he said, urging other countries to deliver on reforms instead.
'Deliver on commitments'
On Friday, International Monetary Fund chief Christine Lagarde called for faster action on reforms promised at a G20 meeting in 2014. That list included commitments meant to simplify regulations and boost trade, investment and technology development.
"Policymakers do not need to invent yet another trick, but they need to deliver steadily on the commitments they have made," Lagarde said.
The G20 gathering in Shanghai came amid fears driven by a 25-year low in China's growth, steep falls in world financial markets, the first US interest rate rise in nine years, and Japan's adoption of negative rates. The IMF cut its 2016 global growth forecast by 0.2 percentage points last month to 3.4 percent, and has also flagged the possibility of another downgrade in April.
nm/ (Reuters, AFP, AP)