The Group of 20 (G20) meeting on Thursday struggled to agree on meaningful action to rebuild the global economy as a crisis erupted in Ireland, pushing its bond spreads out to a record over Germany, and infecting Spain and Portugal.
Even as US President Barack Obama voiced confidence that the leaders would agree on steps for more balanced and sustainable global growth, financial markets sold vulnerable eurozone bonds and shares of British bank RBS.
At the summit, European Commission President Jose Manuel Barroso said that the European Union had the tools to help Ireland, but did not commit to a fresh course of action that could reassure nervy investors.
The G20 summit, billed as a forum where rich nations struggling with the recent global financial crisis could ink a new world order with emerging economic powerhouses like India and China, appeared set to agree to little of substance, as policymakers preferred to avoid damaging rows.
The G20 had hoped to use the summit to soothe tensions over foreign exchange rates generated by imbalances between cash-rich exporting nations and debt-burdened importers.
But behind the scenes, negotiators squabbled over the language in a closing statement to be issued at the summit’s conclusion on Friday. The final version may not venture far beyond agreements reached by G20 finance ministers last month, yet it was still proving difficult to agree on the wording.
Thursday’s agenda included dozens of bilateral meetings, but the summit officially starts with a working dinner on Thursday. Seoul search