Global finance leaders pledge closer cooperation
World finance officials on Friday promised to cooperate more closely and utilize all their policy tools to bolster an anemic global recovery that is now being threatened by an anti-trade backlash in the United States and renewed market unease about Britain’s planned exit from the European Union.
Officials of the Group of 20 major economic powers acknowledged a broad range of new risks ranging from Donald Trump’s vows to impose penalty tariffs to punish China and other countries he believes are pursuing unfair trading practices to extensive worries over whether Britain’s planned exit from the EU could further drag down an already weak global recovery. Chinese Finance Minister Lou Jiwei, the current chairman of the G-20 finance group, said finance officials realized the global situation “remains challenging and complicated” with growth in many nations still too slow despite years of aggressive monetary policies by the Federal Reserve and other central banks.
“Uncertainties and risks facing the world economy have increased,” Lou told reporters. “Geopolitical tensions are growing, terrorist attacks are frequent ... all of these factors have major implications on the international economic and financial markets.”
The G-20 discussions, which began with a working dinner Thursday night, included finance ministers and central bank governors from traditional economic powers such as the United States, Germany and Japan and emerging economies such as China, Brazil and India. Treasury Secretary Jacob Lew and Federal Reserve Chair Janet Yellen represented the United States.
Lew told reporters after the G-20 discussions that he was encouraged that there was growing support among other nations that more tools needed to be employed beyond monetary policy to boost weak global growth, a position the Obama administration has taken for a number of years.
“From China to Canada ... we are seeing more willingness,” Lew said. “I continued to press for all tools to sustain growth.”