By SOPHIE MCCARRICK [email protected]
With prime attention focused on the global debt crisis, G20 (Group 20) leaders met in Los Cabos, Mexico, on June 19, to reassess plans for Europe’s fiscal restraints and to appeal for lightened austerity measures.
It is expected that the G20 leaders will adopt an action plan that will “promote economic growth and jobs” throughout Europe, while pledging to bring down budget deficits.
Although a set strategy is yet to be revealed, it was noted throughout the meeting that the plan may include an increase in funding for the International Monetary Fund (IMF) in order to continue bailout plans as expected for those countries in need.
Speaking to Reuters, Steve Price-Thomas of Oxfam International said: “Europe’s crisis must be fixed because it is becoming a serious drain on developing countries already reeling from volatile food prices and aid cuts. However, it is not good enough for the G20 to fixate on Europe and forget about the rest of the world.
“More than half the world’s poorest people live in G20 countries, and leaders have a responsibility to them as well. The G20 needs to take urgent action to curb commodity speculation. Food volatility is out of control and is a serious threat to the livelihoods of billions across the globe.
“The G20 must use their power to address fundamental economic issues beyond Europe. However, whether or not they do so is a political choice.”
Evaluating the situation, US Department of the Treasury’s Under Secretary for International Affairs, Lael Brainard, said at a press conference on Tuesday: “We see a change in the European discourse on the critical importance of sustaining demand and employment growth.
“In one important way, there is recognition of the need to evaluate plans to consolidate the budgets from a structural point of view. In short, to recognise the deteriorating economic environment,” she added.
Furthermore, it was discussed and relayed that in order to recover the state of global economics, lighter austerity measures must be implemented throughout Europe, but all current imbalances in public finances, which have been caused by the difficult economy, must be taken into account.
When asked whether or not Germany supported the idea of relieving European austerity, Lael Brainard said: “Yes, from our understanding of our German partners, they are taking into account the short-term life line of the plan.”
The stimulus-versus-austerity discussions saw leaders of the United Kingdom, South Korea and Germany come out for austerity, warning that budget cuts were crucial, while Argentina, Brazil and France warned of the severe German-imposed austerity plan for struggling countries such as Portugal, Spain and Greece and pushed for more stimulus spending.