Global financial crisis
June 5, 2010
The two-day G20 meeting of finance ministers and central bankers in Busan, South Korea concluded on Saturday, with no tangible initiatives to tackle the state of the global economy and banking regulation.
The meeting, which was designed to work out an agenda for the G20 summit in Toronto, Canada, at the end of the month, produced a communique that endorses the need for budgetary discipline and regulation of financial markets, but shies away from a global bank levy proposed by the International Monetary Fund (IMF), European countries, including Germany, and the US.
Resistance to global bank levy
Canada and Australia are among those opposed to such a levy, as they believe they should not have to pay to clear up a mess they did not create.
Canada's Finance Minister Jim Flaherty told reporters that the debate on the bank levy had been "a distraction from core issues" and that most ministers "do not support the concept of a universal levy."
German Finance Minister Wolfgang Schaeuble, however, insisted that regulating the banking industry must remain a global priority.
"I pointed out that we will need to make a decision in Toronto," he told the Reuters news agency. "There's a lot of pressure to even go beyond a levy and impose a tax on banks," he added.
Balancing budgets and stimulating growth
The G20 communique calls on member states to get their finances in order to reduce billowing budget deficits, while stimulating growth at the same time.
The IMF and the United States in particular, have repeatedly called on low-growth economies like Germany to boost domestic demand. Germany is Europe's top exporter, but consumer spending is traditionally lackluster, thus creating an imbalance in the country's trade balance.
But Schaeuble again dismissed the criticism, insisting that "we have to look at Europe, or at least the eurozone, as a whole," he told Reuters, meaning that the trade balance of the entire eurozone shows no imbalances with other parts of the world.
Author: Nicole Goebel (Reuters/AFP/dpa)
Editor: Andreas Illmer