London G20: $1 trillion for global economy

By staff

World leaders have agreed to pump £1 trillion into the global economy at the G20 summit in London.

Pledging “global action for global problems”, Gordon Brown unveiled $750 billion worth of new resources for the International Monetary Fund, which includes $250 billion strong special drawing rights.

This second figures will prove particularly useful to middle-income countries.

The main surprise of the day came in the form of $100 billion of new lending to the multilateral development bank, a move warmly welcomed by development groups.

“The old Washington consensus is over,” Mr Brown said.

“This is the day that the world came together to fight back against the global recession.

“Not with words but with a plan for global recovery and for reform.”

Today’s announcement, which follows two days of talks, would be no quick fix, the prime minister said.

Instead he pledged six steps to shorten the recession.

  • Reform of the banking and shadow banking industries, including regulation for hedge funds and an end to tax-tax havens
  • A comprehensive ‘cleaning-up’ of banks
  • The largest-ever macro-economic stimulus in history
  • Increase independent scrutiny for international financial organisations to help combat poverty
  • A $300 billion kick-start in trade financing and $50 billion for the world’s poorest people
  • Commitment to meet later this year at a follow-up summit

“We have begun the process,” Mr Brown said. “A new world order is emerging, one of progressive cooperation, that will demand responsibility from, and deliver fairness, to all.”