IMF: G20 leaders to agree to keep economic stimulus
Leaders of the G-20 largest economies are likely to agree to continue with stimulus measures for their economies when they meet in Pittsburgh at the end of the month, IMF Managing Director Dominique S...
Leaders of the G-20 largest economies are likely to agree to continue with stimulus measures for their economies when they meet in Pittsburgh at the end of the month, IMF Managing Director Dominique Strauss-Kahn said today, DJ reported from Paris. "The trend is good. Finance ministers (in London) understood that the crisis requires that we need to keep boosting the economy... good figures don`t mean that we can lower our guard," Strauss-Kahn told France Info in an interview. "I think heads of state will take this line." Strauss-Kahn also urged heads of state to adopt measures to limit the payment of bonuses to bankers, which pose an "unbearable" problem for ethics as well as for the functioning of the economy. "They are a systemic problem, we can`t leave banks take on risks without any counterparty besides their losses, because... the economy is at stake," Strauss-Kahn said. Longer-term bond yields are likely to rise amid investors' concern about budget deficits built up by governments to fight the global recession, the Bank for International Settlements said, Bloomberg reported. "Fiscal sustainability concerns are likely to affect forward yields that span distant horizons, which are less influenced by near-term expectations about inflation, economic growth and monetary policy," the Basel, Switzerland-based BIS said in a quarterly report yesterday. The BIS expects budget concern to put "upward pressure on "real forward rates." French President Nicolas Sarkozy has threatened to walk out of the summit of G-20 leaders in Pittsburgh next week if there is no agreement on bank bonuses, daily Le Figaro reported today, Reuters reported. "If there is no concrete decision, I will leave," the paper quoted Sarkozy as saying. It did not describe the context in which the remark was made but Sarkozy`s chief of staff Claude Gueant told RTL radio that the president was "extremely determined" to secure a deal. "It should be taken seriously," Gueant said of the threat, which echoes similar French demands before previous international crisis meetings. Most people around the world support significantly increasing government spending to counter the economic crisis, according to a 20-nation opinion poll released today, Reuters reported. The findings will bring solace to leaders such as British Prime Minister Gordon Brown who have backed multi-billion-dollar stimulus programs to try to lift their economies out of recession. G-20 finance leaders agreed this month they would not remove emergency stimulus until the recovery was well entrenched. The survey of more than 22,000 people in 20 countries for the BBC World Service found that, on average, 60% favored "significantly increasing government spending to stimulate the economy".

