- Donald Rumsfeld has ‘no idea’ if he paid taxes correctly
- Bradley Manning named honorary grand marshal of San Francisco Pride parade
- Look out PayPal: Facebook working toward mobile payments system
- U.S. rebukes Iran’s U.N. envoy pick over 1979 embassy attack
- Stoned mom avoids jail after driving 12 miles with baby on roof
- More than 100 ‘inappropriate’ encounters between NYC school staffers, students since 2009: report
- Joe Biden to Boston bombing survivors: ‘America will never, ever stand down’
- FBI failed to throughly vet Boston bombing suspect after Russian lead, report finds
- Atlanta Braves flooded with Hank Aaron hate mail: He’s a ‘scumbag’
- University: Help, our campus is too white
Draft: G-20 will produce plan for global growth
LOS CABOS, Mexico — The leaders of the world’s largest economies will say they are united behind efforts to boost growth and job creation to repair a global economy roiled by fears over the European financial crisis, according to a draft of the statement to be released Tuesday at the end of the Group of 20 annual meeting.
The proposed declaration, however, stops short of committing the nations to greater spending unless conditions worsen. The draft, which could still be modified, urges fiscal responsibility while looking to education, innovation and infrastructure investment to spur economies.
It’s far from certain, however, that the reassuring words will sooth markets whose harsh judgment of the official response to the crisis appears to be pushing Europe closer to catastrophe by the day. World stock markets remained mixed and nervous early Tuesday. But a consumer price inflation drop in Britain and word that Greece will be allowed to renegotiate its debt gave some hope for economic stimulus.
On Monday, less than 12 hours after a Greek election quelled worries that the country could make a devastating exit from the Euro, fears about Spain drove that massive economy’s borrowing costs dangerously close to the level where it would need a bailout, above 7 percent.
The draft statement by the G-20 leaders includes language that appears aimed at easing the Spanish crisis. It tries to reassure investors that Spain’s treasury won’t end up eating the costs of the up to €100 billion rescue of Spain’s banks announced this month.
“Euro area members of the G20 will take all necessary policy measures to safeguard the integrity and stability of the area … and break the feedback loop between sovereigns and banks,” the statement says.
It singles out China and Saudi Arabia for commitments to global economic well-being, lauding a Saudi pledge to keep oil prices from going too high by amping up production from its massive reserves. It praises China for a promise to move away from policies that keep its currency artificially low, giving Chinese exports a price advantage on world markets.
“We welcome Saudi Arabia’s readiness to mobilize, as necessary, existing spare capacity to ensure adequate supply,” the statement says. “We also welcome the commitment by China to allow market forces to play a larger role in determining movements” in the Chinese currency.
Germany must shoulder a large share of contributions to international bailouts of economically weaker European countries that overspent for years and, in exchange, it has been insisting on steep cutbacks from aid recipients such as Greece.
Those cutbacks have led to dramatic economic hardship for voters in Greece and other countries. A growing number of European countries have been advocating spending and growth, not austerity, and the G-20 statement appears to place the group of the world’s largest economies into that camp.
“We are united in our resolve to promote growth and jobs,” the draft says, declaring that the leaders will announce the “coordinated Los Cabos Growth and Jobs Action Plan” to achieve those goals, although the draft does not provide details of the plan.
“Strong sustainable and balanced growth remains the top priority of the G20, as it leads to higher job creation and increases the welfare of people across the world,” the statement reads.
It throws its support specifically behind greater government spending in countries that can afford it if conditions get significantly worse, saying countries with “sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand.”
The plan also hints at flexibility by asking that governments “take into account evolving economic conditions,” which could open the way for more latitude in troubled countries such as Greece.
The draft plan also says the Obama administration pledged to prevent sharp tax increases and government spending cuts from kicking in at the end of the year, as scheduled under current law, to avoid sending the U.S. into another recession.
TWT Video Picks
By returning to goodness, the nation can achieve greatness once again
- Fuel-filled wings, ability to swarm: Pentagon offers glimpse at future of drone fleet
- Secret U.S. assessments show Afghanistan not ready to govern on own
- U.S. military on high alert as Ukraine troops trade gunfire with pro-Russian militants
- Nevada Bundy ranch standoff could leave dirt on Harry Reid reputation
- Russian fighter jet buzzes U.S. Navy destroyer in Black Sea
- 'Culture of intimidation' seen in Nevada ranch standoff
- U.S. Navy to turn seawater into jet fuel
- Al Qaeda mocks U.S. in 'extraordinary' Yemen gathering; experts fear C.I.A. caught flat-footed
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Wal-Mart forced to apologize for 'mistake' favoring English-speaking shoppers
Celebrity deaths in 2014
Top 10 handguns in the U.S.
Chaos as Manhattan building explodes