G20 summit june 2010

Posted: September 8, 2010 in India
  • the fourth G20 summit in less than 2 days has ended at Toronto on june 26-27 2010.
  • The summit ended with global leaders evolving a consensus of sorts on several issues of economic importance.
  • India , which was represented in strength at the summit, says it is happy with the outcome.
  • The leader’s of the world’s most powerful economies pledged to slash back spiraling debts on Sunday as they sought to re-balance a global economy knocked off its axis by a financial crisis.
  • The heads of the G20, which groups established world powers & the most dynamic emerging players, vowed to nurture the still shaky recovery with coordinated measures to spur growth & ensure financial stability.
  • But observers quickly noted that the agreements were not binding & the summit statement was filled with caveats & exemptions, pushing many of the tougher decisions on to the next G20 summit in Seoul in November.
  • The leaders’ joint statement, released at the end of 2 days of talks in Toronto , wanted that “failure to implement consolidation where necessary would undermine confidence & hamper growth.
  • “reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 & stabilize/reduce government debt-to-GDP ratios by 2016”, it promised.
  • Nevertheless, the group exempted Japan & its huge public deficit from the pledge & noted that measures should be “tailored to national circumstances”.
  • The statement called for “greater exchange rate flexibility in some emerging markets” but shied away from specifically fingering china, which is under pressure to allow the yuan to strengthen to ease trade imbalances.
  • Amid US fears that global growth may once again become over dependent on American consumer, the G20 called for “efforts to re balance global demand to help ensure global growth continues on a sustainable path”.
  • European leaders – Germany’s chancellor angela merkel, French president Nicolas sarkozy & Britain’s PM david Cameron —  came to the talks calling for fiscal restraint & a new levy on bank profits.

Outcome for India :

  • The 1st point was the civilian nuclear pact with Canada.
  • Canada is an important supplier of uranium & nuclear technologies.
  • There were several other agreements for mining & other MoUs signed.
  • Another key bilateral was India US bilateral, manmohan singh meeting with barack obama.
  • The key thing was the India told US to take disclosures by headley; the 26/11 accused more seriously & wanted the US to get Pakistan to act more terror.
  • PM asks rich nations to resist protectionism making it clear that each country needed to devise its own strategy to weather the deepest global financial crisis in decades.
  • Stating that the India was better placed in handling the situation with an average growth of 7% in the past 2 fiscals, the PM said emerging economies must also rely less on exports & push domestic demand.

China sets strongest Yuan rate in years after G20 pressure:

  • the people’s bank of china said it set the central parity rate – the center point of the currency’s allowed trading band – at 6.7890 to the dollar.
  • It was the strongest level policy makers have set china unplugged the currency in july 2005 & moved to a tightly managed floating exchange rate.
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