WASHINGTON, Nov 15 (Reuters) - Leaders of advanced and major developing countries discussed actions on Saturday to tackle the financial crisis and restore confidence in a global economy fast tumbling into recession.
Below are comments they made at the Group of 20 leaders' summit, which wraps up here in Washington later in the day.
INDIAN PRIME MINISTER MANMOHAN SINGH:
'Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims. Recession will hit the export performance of developing countries and the choking of credit, combined with elevated risk perception, will lead to lower capital flows and reduced levels of foreign direct investment. The combined effect will be to slow down economic growth in developing countries.'
'A slowing down of growth in developing countries will push millions of people back into poverty, with adverse effects on nutrition, health and education levels. These are not transient impacts but will impact a full generation.'
SINGH ON FISCAL STIMULUS:
'A coordinated fiscal stimulus by countries that are in a position to do so would help to mitigate the severity an duration of the recession. It would also send a strong signal to investors around the world.'
SINGH ON NEW FINANCIAL ARCHITECTURE
'The new architecture we design must include a credible system of multilateral surveillance, which can signal the emergence of imbalances that are likely to have systemic effects, and also put in motion a process of consultation that can yield results in terms of policy coordination ... Bodies such as the G7 are no longer sufficient to meet the demands of the day.'
FINANCIAL STABILITY FORUM CHAIRMAN MARIO DRAGHI:
'Recent emergency measures have achieved a fragile stabilization of the financial system. However the real economy is decelerating rapidly and there are no signs that this deceleration is slowing,' Financial Stability Forum Chairman Mario Draghi told G20 leaders, according to a source who attended the dinner where made the comments on Friday.
'It is likely that most of the real slowdown is still ahead of us,' Draghi said, according to the source.
BRAZILIAN FOREIGN MINISTER CELSO AMORIM:
'Both Brazil and the United States are happy with the G20 communique. It includes strong references to Doha, including a provision that official discussions be held before year-end. It also includes measures aimed at greater (financial) supervision and coordinated steps to stimulate the economy. It consolidates the G20 process. I think the G20 has effectively replaced the G8.'
BRAZILIAN PRESIDENT LUIZ INACIO LULA DA SILVA:
'The best solution to keep the financial crisis from worsening is for the rich countries to solve their economic problems. The U.S. and Europe must solve the chronic problem of their economic policies.
'Brazil's central bank and Finance ministry are working to stoke domestic demand to partially offset a drop-off in exports.
'The bulk of the bailout money from the U.S. and Europe has yet to reach its final beneficiaries and thus boost consumer spending and allow industries to increase production.
'I think this crisis will end faster than people are expecting. The G20 cannot allow a crisis triggered by speculation to hurt production and the real economy of developing countries.'
U.S. PRESIDENT GEORGE W. BUSH:
Summit leaders were looking for 'a way forward to make sure that such a crisis is unlikely to occur again.'
'I am pleased that the leaders reaffirmed the principles behind open markets and free trade,' he told reporters before the talks resumed. 'One of the dangers during a crisis such as this is that people will start implementing protectionist policies.'
'This crisis has not ended. There's some progress being made but there's still a lot more work to be done.'
U.K. PRIME MINISTER GORDON BROWN:
'These are tough talks because countries are coming from very different positions and we have to bring them together.'
-- On economic policy: He is urging joint action on fiscal and monetary stimulus. 'This is difficult for some countries,' he said. 'We're in an environment where there is very low inflation and therefore scope for action.'
'We've got to see how countries will respond on the fiscal side. The important thing is the recognition, which has not been true in previous downturns, of the importance of fiscal policy. ... If inflation was very high and likely to rise, then the argument about fiscal policy would be different because we would be worried about the longer-term effects on the economy. In a period of low inflation, in fact when inflation is coming down very fast, the case for fiscal policy is far stronger indeed.'
-- On rates: 'Obviously most of the decisions about monetary policy are rightly made by the central banks and the question is how central banks view the current conditions of the economy and my point is that we are in an environment where there is very low inflation and therefore there is scope for action.
-- On IMF: 'The IMF should have a bigger role in helping distressed economies and the World Bank should play a far bigger role in helping developing countries who have been hit by oil prices and food price rises.
'There's a flight of capital from these countries that is very worrying for the developing countries and we are hoping the World Bank will be able to come in with a major support system back up by the IMF for distressed economies.'
-- On global financial institutions: 'There are different positions of view about what should be done. But again I believe that is possible that we will get a timetable for immediate reforms of the current banking and financial system.
'I think we will get an agreement, if my sense of last night is right, that at a next meeting we'll have a plan for the detailed reform of the international financial institutions brought forward.'
-- On trade and open markets: 'There is a general recognition that if protectionism starts to grow in any continent or any country then the chances of the world economy recovering are diminished'
GERMAN CHANCELLOR ANGELA MERKEL:
'This action plan shows that we are able to act,' she told reporters. 'The action-plan will contain around 50 measures, which will be put into reality by the end of March.'
'Then there will be another summit on the level of the leaders.' she said. 'This is a new start we are marking.'
'The principle is that there should be no markets, no actors in financial markets and no product without supervision or regulation.'
'There was the great common willingness to act together to ensure that a crisis like this will not happen again and that the world economy will get back on a growth path as soon as possible.' Keywords: FINANCIAL/SUMMIT HIGHLIGHTS 6 (Reporting by Stefano Bernabie, Pedro Nicolaci da Costa, Matt Falloon, Gernot Heller and Matt Spetalnik. Washington newsroom, (202) 898 8310) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Below are comments they made at the Group of 20 leaders' summit, which wraps up here in Washington later in the day.
INDIAN PRIME MINISTER MANMOHAN SINGH:
'Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims. Recession will hit the export performance of developing countries and the choking of credit, combined with elevated risk perception, will lead to lower capital flows and reduced levels of foreign direct investment. The combined effect will be to slow down economic growth in developing countries.'
'A slowing down of growth in developing countries will push millions of people back into poverty, with adverse effects on nutrition, health and education levels. These are not transient impacts but will impact a full generation.'
SINGH ON FISCAL STIMULUS:
'A coordinated fiscal stimulus by countries that are in a position to do so would help to mitigate the severity an duration of the recession. It would also send a strong signal to investors around the world.'
SINGH ON NEW FINANCIAL ARCHITECTURE
'The new architecture we design must include a credible system of multilateral surveillance, which can signal the emergence of imbalances that are likely to have systemic effects, and also put in motion a process of consultation that can yield results in terms of policy coordination ... Bodies such as the G7 are no longer sufficient to meet the demands of the day.'
FINANCIAL STABILITY FORUM CHAIRMAN MARIO DRAGHI:
'Recent emergency measures have achieved a fragile stabilization of the financial system. However the real economy is decelerating rapidly and there are no signs that this deceleration is slowing,' Financial Stability Forum Chairman Mario Draghi told G20 leaders, according to a source who attended the dinner where made the comments on Friday.
'It is likely that most of the real slowdown is still ahead of us,' Draghi said, according to the source.
BRAZILIAN FOREIGN MINISTER CELSO AMORIM:
'Both Brazil and the United States are happy with the G20 communique. It includes strong references to Doha, including a provision that official discussions be held before year-end. It also includes measures aimed at greater (financial) supervision and coordinated steps to stimulate the economy. It consolidates the G20 process. I think the G20 has effectively replaced the G8.'
BRAZILIAN PRESIDENT LUIZ INACIO LULA DA SILVA:
'The best solution to keep the financial crisis from worsening is for the rich countries to solve their economic problems. The U.S. and Europe must solve the chronic problem of their economic policies.
'Brazil's central bank and Finance ministry are working to stoke domestic demand to partially offset a drop-off in exports.
'The bulk of the bailout money from the U.S. and Europe has yet to reach its final beneficiaries and thus boost consumer spending and allow industries to increase production.
'I think this crisis will end faster than people are expecting. The G20 cannot allow a crisis triggered by speculation to hurt production and the real economy of developing countries.'
U.S. PRESIDENT GEORGE W. BUSH:
Summit leaders were looking for 'a way forward to make sure that such a crisis is unlikely to occur again.'
'I am pleased that the leaders reaffirmed the principles behind open markets and free trade,' he told reporters before the talks resumed. 'One of the dangers during a crisis such as this is that people will start implementing protectionist policies.'
'This crisis has not ended. There's some progress being made but there's still a lot more work to be done.'
U.K. PRIME MINISTER GORDON BROWN:
'These are tough talks because countries are coming from very different positions and we have to bring them together.'
-- On economic policy: He is urging joint action on fiscal and monetary stimulus. 'This is difficult for some countries,' he said. 'We're in an environment where there is very low inflation and therefore scope for action.'
'We've got to see how countries will respond on the fiscal side. The important thing is the recognition, which has not been true in previous downturns, of the importance of fiscal policy. ... If inflation was very high and likely to rise, then the argument about fiscal policy would be different because we would be worried about the longer-term effects on the economy. In a period of low inflation, in fact when inflation is coming down very fast, the case for fiscal policy is far stronger indeed.'
-- On rates: 'Obviously most of the decisions about monetary policy are rightly made by the central banks and the question is how central banks view the current conditions of the economy and my point is that we are in an environment where there is very low inflation and therefore there is scope for action.
-- On IMF: 'The IMF should have a bigger role in helping distressed economies and the World Bank should play a far bigger role in helping developing countries who have been hit by oil prices and food price rises.
'There's a flight of capital from these countries that is very worrying for the developing countries and we are hoping the World Bank will be able to come in with a major support system back up by the IMF for distressed economies.'
-- On global financial institutions: 'There are different positions of view about what should be done. But again I believe that is possible that we will get a timetable for immediate reforms of the current banking and financial system.
'I think we will get an agreement, if my sense of last night is right, that at a next meeting we'll have a plan for the detailed reform of the international financial institutions brought forward.'
-- On trade and open markets: 'There is a general recognition that if protectionism starts to grow in any continent or any country then the chances of the world economy recovering are diminished'
GERMAN CHANCELLOR ANGELA MERKEL:
'This action plan shows that we are able to act,' she told reporters. 'The action-plan will contain around 50 measures, which will be put into reality by the end of March.'
'Then there will be another summit on the level of the leaders.' she said. 'This is a new start we are marking.'
'The principle is that there should be no markets, no actors in financial markets and no product without supervision or regulation.'
'There was the great common willingness to act together to ensure that a crisis like this will not happen again and that the world economy will get back on a growth path as soon as possible.' Keywords: FINANCIAL/SUMMIT HIGHLIGHTS 6 (Reporting by Stefano Bernabie, Pedro Nicolaci da Costa, Matt Falloon, Gernot Heller and Matt Spetalnik. Washington newsroom, (202) 898 8310) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.