G20 leaders discuss how to get the world economy out of the crisis
At the G20 summit on June 19, 2012, in Los Cabos, Mexico, several practical steps to get the world economy out of its current crisis were discussed. Specifically, the participants decided to grant another $450 billion to the International Monetary Fund to build up its reserves to ensure financial stability and to overcome the aftermath of the global economic recession.
Eighteen countries will contribute - Australia, Austria, Brazil, China, Colombia, France, Germany, India, Luxembourg, Mexico, Poland, Russia, South Africa, Spain, Sweden, Thailand, Turkey and the UK. Russia will contribute $10 billion from its Central Bank, President Vladimir Putin said at the press conference summarizing the event.
The G20 Leaders also discussed the state of previous commitments to reform IMF quotas, and analyzed the situation in the Eurozone. According to the final declaration, the G20 member states intended to protect the stability and integrity of the Eurozone, and approved its economies' steps since the previous summit to promote fiscal responsibility and financial stability.
Particularly, the summit approved the Spanish plan of banking recapitalization and the European Commission's support for Spain's rights of financial restructuring. Generally, all the European participants in the forum were willing to do whatever is necessary to protect the Eurozone's integrity and stability, improve financial markets, and break the vicious cycle of interdependence between the states and banks when market tensions increase.
Mr. Putin did not see any trends toward continued deterioration in Europe, and thought optimistic expectations were well grounded. As he said, Europe is eager to settle the crisis by addressing institutional economic problems and enhancing financial discipline. He expressed the hope that all relevant decisions for the Eurozone would be taken quickly.
The U.S. President Barack Obama voiced support for efforts made by the European Union and the G20 to prevent the crisis from snowballing. He said at the press conference after the summit: "The one that's received the most focus obviously and that does have a significant impact on the United States as well as globally is the situation in Europe <...> Our friends in Europe clearly grasp the seriousness of the situation and are moving forward with a heightened sense of urgency. I welcome the important steps that they have already taken to promote growth, financial stability and fiscal responsibility. I am very pleased that the European leaders have said that they will take all necessary measures to safeguard the integrity and stability of the Eurozone, to improve the functioning of the financial markets."
The participants also confirmed their willingness to implement structural reforms and change statutory regulations to pace up economic growth in the medium term, and increase financial stability. The G20 states also intend to make Eurozone protection watertight - particularly through bank inspection, improvement and recapitalization, deposit insurance, and extension of the moratorium on protectionism up to 2014.