G20 Summit in London:

World leaders agree to tackle global crisis

Leaders of the world’s largest economies have reached an agreement at the London Summit to tackle the global financial crisis with measures worth $1.1 trillion (681 billion pounds).

To help countries with troubled economies, the resources available to the International Monetary Fund (IMF) will be tripled to $750 billion. There will also be sanctions against secretive tax havens and tougher global financial regulation.

And the G20 has committed about $250 billion to boost global trade.

Turning point

US President Barack Obama said the summit could mark a “turning point” in the pursuit of economic recovery and make progress in reforming a “failed regulatory system”. “By any measure the London Summit was historic. It was historic because of the size and the scope of the challenges that we face and because of the timeliness and the magnitude of our response,” he said.

Prime Minister Gordon Brown said there was “no quick fix” for the world economy but there was a commitment to do whatever was necessary.

“This is the day that the world came together to fight back against the global recession, not with words, but with a plan for global recovery and for reform and with a clear timetable for its delivery,” Brown said.

Another G20 meeting will be held in New York in September to check on progress, the BBC has learned.

The deal was announced shortly before the European stock markets closed and gave leading indexes a significant boost. London’s FTSE 100 index of leading shares ended 4.3% higher. In Paris, the Cac 40 jumped 5.4% and in Frankfurt, the Dax rose 6%.

On behalf of the G20, Brown announced the following steps:

IMF boost

The IMF has been one of the biggest beneficiaries of the G20 summit. The resources it has to help troubled economies will be increased to $500 billion.

An overdraft facility will also be increased to $250 billion (in the IMF’s currency, so-called Special Drawing Rights) that all members can call upon. Brown said that there would be a crackdown on tax havens to prevent the loss of sorely needed tax revenue.

Shortly after the Summit finished, the Organisation of Economic Co-operation and Development published a blacklist of countries deemed uncooperative. It said Costa Rica, Malaysia, Philippines and Uruguay had not made any commitment to respect international standards.

“We have agreed tough standards and sanctions for use against those who don’t come into line in the future,” Brown said. President Obama was said to have played a key role in brokering the agreement on tax havens, resolving differences between France and China.

French President Nicolas Sarkozy said that the conclusions of the G20 Summit were “more than we could have hoped for”. A 1.1 trillion... how can that ever be accounted for? Success for them.

Failure for everyone else. Earlier, there had been suggestions of rifts between France and Germany and the US and the UK.

The US and the UK emphasised the need for public spending to ease the crisis while France and Germany were keen for tougher financial regulation.

Sarkozy had threatened to walk out of the meeting if it did not yield concrete results.

German Chancellor Angela Merkel also praised the outcome. She said the new measures would give the world a “clearer financial market architecture” and the agreement was “a very, very good, almost historic compromise”.

Her Finance Minister, Peer Steinbrueck, said he was pleased that the G20 statement did not oblige States to launch further economic stimulus packages.

Protests

Protesters gathered outside the Summit, but in smaller numbers than during Wednesday’s demonstrations in London’s financial district. Several hundred staged “noisy but calm” protests near the Excel centre, representing groups including the Stop the War Coalition and CND.

And about 400 more demonstrators were boxed in by police outside the Bank of England in London’s financial district, during angry but peaceful protests.

More than 100 people were arrested over the two days of protests - 86 of them on Wednesday, police said.A small group of protesters gathered earlier at the London Stock Exchange, but later dispersed.

Poor benefit

The G20 countries have pledged $100 billion in aid for developing countries, more than expected. The money will be dispensed through multilateral lenders such as the Asian Development Bank.

The measure that could make the most difference in the short term for the poorest countries is the availability of $250 billion of trade credit, says BBC international development correspondent David Loyn.

It will enable goods currently rotting on the quayside in Africa to move again, he says. BBC business editor Robert Peston said the tougher financial regulation announced by the G20 was a significant step.

He said it sounded the death knell for the freewheeling Anglo-American way of banking and conducting financial markets. However, he said the measures would not get the world out of recession overnight.

New funding pledges

$500 billion for the IMF to lend to struggling economies $250 billion to boost world trade $250 billion for a new IMF “overdraft facility” countries can draw on $100 billion that international development banks can lend to poorest countries IMF will raise $6 billion from selling gold reserves to increase lending for the poorest countries

Courtesy BBC