By Andrew Porter, Robert Winnett and Toby Harnden
G20 summit: Gordon Brown announces ‘new world order’
Gordon Brown announced the creation of a “new world order” after the conclusion of the G20 summit of world leaders in London.
The Prime Minister claimed to have struck a “historic” deal to end the global recession as he unveiled plans to plough more than $1 trillion into the world economy.
Barack Obama, the US President, hailed the deal as a “turning point”
Under the $1.1 trillion (£750 billion) agreement, which followed several days of intense negotiation, struggling economies will be offered money provided to the International Monetary Fund (IMF) by wealthier nations.
“Today’s decisions, of course, will not immediately solve the crisis. But we have begun the process by which it will be solved,” Mr Brown said. “I think a new world order is emerging with the foundation of a new progressive era of international co-operation,”
Following the announcement of the deal at the ExCeL conference centre in London’s Docklands, the FTSE share index closed up more than four per cent.
The success was echoed by Mr Obama. “By any measure the London summit was historic,” he said. “It was historic because of the size and the scope of the challenges that we face and because of the timeliness and magnitude of our response.”
One trillion dollars will be made available to the IMF and, in turn, to countries threatened by the downturn. However, Mr Brown made it clear that he did not intend to apply for funds for Britain, despite opponents warning that the country will soon need a bail-out due to the growing deficit in the public finances.
The Financial Times
By George Parker, Chris Giles and Edward Luce
G20 leaders hail crisis fightback
a new future for financial regulation.
Gordon Brown, UK prime minister, host of the summit, said the meeting marked the emergence of a “new world order”, as he unveiled what leaders claimed was a $1,100bn package of measures to tackle the global downturn, including support for lower income countries and a $250bn plan to boost the international money supply.
The leaders papered over divisions between the US and Europe about whether the world could afford a new fiscal stimulus.
President Barack Obama described the summit’s measures as “bolder and more rapid than any international response that we’ve seen to a financial crisis in memory”
Mr Brown claimed that China had agreed a $40bn contribution to IMF funds. Chinese authorities could not confirm that last night. The IMF declined to comment
The summit text included commitments to curb “risky” bank pay and bonuses, but offered little new on monetary policy action or efforts to clean up bank balance sheets.
The G20 agreed to allow the IMF to create $250bn of Special Drawing Rights, its own currency, comprising dollars, euros, yen and sterling,