G-20 countries pledge stronger efforts to bolster recovery
WASHINGTON – World finance leaders are pledging to pursue further actions to bolster a disappointingly weak global recovery. They also reaffirmed their commitment to avoid using their currencies as an economic weapon to gain unfair advantage in foreign trade.
Finance ministers and central bank presidents from the leading rich and developing nations, or Group of 20, wrapped up two days of talks Friday with a joint statement that said they had managed to avoid some of the biggest economic threats, but growth was still too weak in many countries and unemployment too high.
The joint statement revealed no major new policy initiatives but did urge the United States and some other countries to emphasize efforts to jump-start growth even if that meant less emphasis on deficit reduction in the near term.
“Further actions are required to make growth strong, sustainable and balanced,” the G-20 said in their joint statement.
The United States was represented at the talks by Treasury Secretary Jacob Lew, who was attending his first G-20 meeting since taking office in late February, and Federal Reserve Chairman Ben Bernanke. The discussions were led by Russian Finance Minister Anton Siluanov whose country is leading the G-20 this year.
The G-20 joint statement singled out the recent aggressive credit-easing moves pushed by Japanese Prime Minister Shinzo Abe, saying they were intended to stop prolonged deflation and support domestic demand.
Those comments were viewed as giving a green-light to Japan’s program, which has driven the value of the yen down by more than 20 percent against the dollar since October. That sizable decline has raised concerns among U.S. manufacturing firms that Japan’s real goal is not to fight deflation, a destabilizing period of falling prices, but to weaken the yen as a way to gaining trade advantages.
To address those concerns, the G-20 did repeat language it used in February that all countries should not use their currency as a trade weapon and guard against policies that could trigger currency wars.
Japanese officials told reporters following the discussions that they were pleased by the support the G-20 had given them to pursue growth policies in an effort to lift the world’s third largest economy out of its two-decade slump.
Haruhiko Kuroda, head of the Bank of Japan, said that Japan would continue with its monetary easing policies which he said were aimed at stimulating domestic growth and fighting deflation and not an effort to gain trade advantages.
“There has been international understanding and acceptance of this so we can have further confidence to appropriately conduct monetary policy,” he told reporters at a briefing after the G-20 talks ended.