G20 leaders cannot solve all of the world’s economic woes on April 2, no matter how high British Prime Minister Gordon Brown builds expectations for a landmark financial summit that he will host in London.
As Angel Gurria, head of the Organization for Economic Co-operation and Development, describes it: “There is no ‘open sesame’. We’re not talking about pulling rabbits out of hats.”
G20 finance ministers made tentative advances during their preparatory talks at a countryside hotel south of London at the weekend, promising to raise the amount of funds available for emerging market economies that cry out for help.
Absent was the public bickering over economic stimulus versus regulation that had plagued the runup to their session.
Beyond that, they rehashed and renewed many other pledges made when G20 leaders held their first summit on the global financial and economic crisis last November, saying free-wheeling hedge funds would no longer escape regulation.
What perhaps counts most right now, economists say, are two things — their joint commitment to do whatever it takes to keep the world economy afloat, and Washington’s plans to tackle the toxic assets that started the crisis and will perpetuate it as long they fester untreated on banks’ books.
“We are left hanging on the hope that the U.S. will finally find the magic bullet to restore transparency and confidence in the financial sector, and that they will do it soon,” says Marco Annunziata, London-based chief economist at UniCredit.