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Keep spending, Darling urges G20 'Job not done', Darling tells G20
(about 3 hours later)
G20 nations must continue spending to ensure the global economy returns to sustainable growth next year, UK Chancellor Alistair Darling has said. The Group of 20 richest nations should not be complacent as the global economy starts to recover, UK Chancellor Alistair Darling has said.
Germany and France want G20 nations to discuss "exit strategies" from the measures used to stimulate economies at a G20 finance meeting this weekend. Germany and France want the G20 to discuss "exit strategies" from the measures used to stimulate economies at a meeting of finance ministers.
But Mr Darling told the Independent: "The biggest single risk to recovery is that people think the job is done."But Mr Darling told the Independent: "The biggest single risk to recovery is that people think the job is done."
Britain also says a French plan to cap banker bonuses would be "unworkable". He also said a French plan to cap banker bonuses would be "unworkable".
Removing government stimulus packages is expected to be on the agenda when G20 finance ministers meet in London from Friday, ahead of the G20 leaders' summit in Pittsburgh later this month.Removing government stimulus packages is expected to be on the agenda when G20 finance ministers meet in London from Friday, ahead of the G20 leaders' summit in Pittsburgh later this month.
With Japan, France and Germany officially out of recession, minds are turning to co-ordinating the withdrawal of billions of aid and stimulus measures that were injected into countries by their governments over the past year.
'Critical stage''Critical stage'
Mr Darling told the newspaper: "There is a real risk that either governments or people generally think 'We have done that, we are on the path to recovery'."Mr Darling told the newspaper: "There is a real risk that either governments or people generally think 'We have done that, we are on the path to recovery'."
"A lot of obstacles" remained to be negotiated on the path to recovery, including rising oil prices and unemployment, Mr Darling said. "We are at a critical stage," he added."A lot of obstacles" remained to be negotiated on the path to recovery, including rising oil prices and unemployment, Mr Darling said. "We are at a critical stage," he added.
ANALYSIS Steve Schifferes, BBC economics reporter
There is no doubt that Mr Darling's remarks reflect the fact it is far from certain that the world economy will recover quickly from the current economic crisis.
However, his difficulty is that the UK itself has one of the smallest economic stimulus packages among G20 countries, having been forced to spend heavily on propping up the banking sector.
Both the US and the UK, which have been hardest hit by the crisis, would like some help from the rest of world, and the economic logic is impeccable.
But the political logic of getting the German government to increase its budget deficit further in an election year to help the UK is shakier.
Separately, the European Union is to increase its level of funding to the International Monetary Fund (IMF) to 125bn euros ($178bn; £109bn) from the 75bn euros promised at the last G20 meeting in April.
The UK, which has been pushing for the EU to increase its contribution to funding the IMF, will give about £16bn of that.
Bonuses
Meanwhile, European leaders are discussing how to end the excessive bank bonus culture.Meanwhile, European leaders are discussing how to end the excessive bank bonus culture.
The UK opposes curbs on bonuses, with Prime Minister Gordon Brown preferring payouts based on long-term success.The UK opposes curbs on bonuses, with Prime Minister Gordon Brown preferring payouts based on long-term success.
Observers say the issue of bonuses is not one on which consensus will be easily reached.Observers say the issue of bonuses is not one on which consensus will be easily reached.
France is proposing a series of mandatory caps on bonuses - which the head of the Eurogroup of eurozone finance ministers, Luxembourg's Jean-Claude Juncker, said he "totally supported".France is proposing a series of mandatory caps on bonuses - which the head of the Eurogroup of eurozone finance ministers, Luxembourg's Jean-Claude Juncker, said he "totally supported".
However, it has been acknowledged that the UK must be persuaded to give its support if French President Nicolas Sarkozy's desire to push through strong G20 regulation on the issue is to succeed in Pittsburgh.However, it has been acknowledged that the UK must be persuaded to give its support if French President Nicolas Sarkozy's desire to push through strong G20 regulation on the issue is to succeed in Pittsburgh.
The bankers are partying like it's 1999, and it's 2009 Anders BorgSwedish Finance Minister
Mr Darling said he was wary of anything that amounted to a "global pay policy" but saw "no problem" with the French plans to claw back bonuses after three or four years if they were not justified by performance.Mr Darling said he was wary of anything that amounted to a "global pay policy" but saw "no problem" with the French plans to claw back bonuses after three or four years if they were not justified by performance.
In comments ahead of the finance ministers meeting, being held in London, Sweden's Anders Borg said it was "very important that we as politicians give a clear message that old bonuses must come to an end". 'Partying like 1999'
In comments ahead of the finance ministers' meeting in London, Sweden's Anders Borg said it was "very important that we as politicians give a clear message that old bonuses must come to an end".
"The bankers are partying like it's 1999, and it's 2009. The bonus culture must come to an end and it must come to an end in Pittsburgh," he said, calling for finance ministers to have a "common message" on bonuses."The bankers are partying like it's 1999, and it's 2009. The bonus culture must come to an end and it must come to an end in Pittsburgh," he said, calling for finance ministers to have a "common message" on bonuses.
Dutch Finance Minister Wouter Bos said that "not every country is moving as quickly as it could" on the issue of banker payouts.Dutch Finance Minister Wouter Bos said that "not every country is moving as quickly as it could" on the issue of banker payouts.
And Belgian Finance Minister Didier Reynders said governments should be able to "intervene" in bonuses, and that EU countries should act together, as well as trying to get agreement from the US and others.And Belgian Finance Minister Didier Reynders said governments should be able to "intervene" in bonuses, and that EU countries should act together, as well as trying to get agreement from the US and others.
US politicians are discussing legislation to ban pay and bonus packages which encourage bankers and traders to take risks that could cause damage to the wider economy.US politicians are discussing legislation to ban pay and bonus packages which encourage bankers and traders to take risks that could cause damage to the wider economy.
And a so-called "pay tsar" appointed by President Obama is examining banker pay proposed by seven US banks which received government bail-outs. And a so-called "pay tsar" appointed by President Barack Obama is examining banker pay proposed by seven US banks which received government bail-outs.
Those who have already repaid money from the Troubled Asset Relief Programme (Tarp) will not have to have their pay and bonus schemes scrutinised.Those who have already repaid money from the Troubled Asset Relief Programme (Tarp) will not have to have their pay and bonus schemes scrutinised.