G20 leaders are close to finalizing today a joint action plan endorsed by all member states that would seek to restore economic growth and tackle rising unemployment.
Senior officials have been pushing for a coordinated action plan to emerge from the Summit in Cannes, stressing the dangers of a lack of growth.
In a joint statement issued yesterday evening, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy said that they had “stressed” the importance of agreeing a joint action plan in their discussions with G20 leaders yesterday afternoon.
“Only with ambitious action by all, we will be able to generate new growth and get the 200 million unemployed worldwide back to work,” the statement added.
Australian prime minister Julia Gillard confirmed after yesterday afternoon’s meeting that G20 leaders had made progress towards agreeing a joint plan. “There is a willingness to work together to address the economic circumstances,” she told a press briefing last night.
“People are looking to leaders to grapple with this sense of uncertainty and to answer it with a plan of action. One central message is about jobs because if the global economy does not work that will cost jobs.”
G20 chair Nicolas Sarkozy last night also acknowledged that a plan was in the offing, but stressed that it would not be a one-size-fits-all approach. “It will not be one set of measures for all countries, it will [outline] different measures for different countries,” he said.
European Commission President Barroso outlined the broad basis of the expected growth plan earlier this week.
Writing in Emerging Markets, Barroso said that Europe sought an “action plan for growth to which all G20 members should contribute, some through credible medium-term fiscal consolidation plans, others by further rebalancing their domestic economy in the short term and improving exchange rate flexibility.”
G20 leaders have been under intense pressure to prioritize growth at this year’s Summit, amid clear signs of a slowdown across both developed and emerging markets in recent months, and divisions between G20 member nations over the pace and scale of fiscal austerity drives.
The dogged pursuit of deficit reduction plans amid growing signs of a renewed economic slowdown has also come under heavy fire.
A group of former European heads of state and leading economists yesterday called on G20 leaders to pull back from their focus on austerity and draw up a “credible” growth strategy.
“If everyone pursues austerity today, there is no way out for those with unhealthy balance sheets,” the letter, published by German think tank the Nicolas Berggruen Institute and passed to Emerging Markets, said.
Writing in today’s edition of Emerging Markets, Kemal Dervis and Homi Kharas of the Brookings Institution echoed this message, but warned that any plan to revive growth had to move beyond a purely fiscal or monetary approach.
“Policymakers have to look at the distribution of income and adjust the structure of policy to achieve real impact,” they wrote.