The G20 leaders failed to come up with any concrete policy steps to pull the global economy out of recession at the London summit. The leaders vowed to restore growth and jobs, but lacked specifics about fiscal measures by each country and there were no binding promises.
There were expectations that the summit would tackle the issue of rising protectionism, but the summit is not an appropriate place to discuss international trade and investment. We saw a measure of results in expanding assistance to emerging economies, but it made the summit look as if it were a mere international conference on aid to emerging economies.
Since the collapse of Lehman Brothers last September, G20 countries have been trying to stabilize the financial markets with central banks taking exceptional action and cutting interest rates aggressively. The governments’ focus now appears to have shifted to restoring growth and protecting jobs from reacting to contingencies arising from the financial crisis.
The G20 leaders vowed fiscal stimulus totalling $5 trillion and to raise output by 4 percent by the end of next year. However, it failed to break down how much spending each country would bear. There is no indication that there are any binding targets. Since the financial crisis erupted, it has become increasingly difficult to coordinate policy given differences in the economic, fiscal and financial situations of the member countries.