G20 Disagreements and Global Economic Reforms

There are a number of disagreements between G20 member nations. Although the passage of a US financial reform bill was an important step for the recovering world economy, diverging national assessments threaten a coordinated global strategy.

The UN would like to see the developed world assume a greater share of its responsibilities for the green economy. Americans and Europeans disagree on whether to maintain or withdraw stimulus. The US warns against choking off nascent growth, while European countries are imposing austerity measures to manage rising levels of debt.

Canada disagrees with key European nations on taxing banks. Canada has argued against taxing banks to guard against future financial crises, while Britain, France and Germany want to see a tax on the banking sector.

China’s recent announcement of renewed flexibility in its currency, the yuan, will probably succeed in deflecting attention away from new protectionist measures.

There appears to be agreement that the global system is under-capitalized and a there is a broad consensus on the need to invest more capital. Although there is agreement on the broader issue, there is disagreement on implementation time frames. Europe wants to move slowly to give its banks time to adjust, while the U.S. would prefer to see a faster pace.

The G20 has a pivotal role to play, decisions made by economic leaders in Toronto will not only determine the future of the economy, they will decide the future of our environment. While there seems to be agreement on the need for sustainable growth, charting a strategy to get there is proving difficult.

We need international economic reforms that will help maintain stability. We also need a strategy that positions green as the engine that will drive the global economy.
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