Afternoon:
10°c
G20 action is no quick fix for slump, admits Darling
Paul Waugh and Robert Fox3 Apr 2009
Alistair Darling admitted today that there would be no "overnight fix" to the recession as questions remained over banks' toxic assets and the size of the global economic stimulus.
In marked contrast to the Prime Minister's grand rhetoric yesterday about a "new world order", the Chancellor said it would take time for the measures to be felt by ordinary voters.
As Gordon Brown, Barack Obama and others headed from London to Strasbourg to mark the 60th anniversary of the Nato alliance, critics suggested that the $1trillion stimulus claimed by the Prime Minister was made up of only $350billion of new money and that much would never actually be spent.
As focus switched from economics to tackling terrorism and the future of Afghanistan, the Conservatives warned that Mr Brown had to show how yesterday's grand deal translated into the daily lives of British voters.
Before flying to France, President Obama also suggested it would take time for the G20 package to be implemented. He warned that sluggish bureaucracies and corruption could hinder attempts to emerge from the world downturn.
A leading economist pointed out that the "urgent problem" of toxic bank assets remained untouched in the G20 summit and that there were signs of the American Congress setting back moves to improve transparency.
UBS chief economist George Magnus said the G20 did little to tackle the issue of the estimated $1.3trillion of "bad" loans held by banks across the globe.
Even as the London summit deal was being signed yesterday, Congress bowed to pressure from Wall Street bankers and changed the rules to allow firms to put their own price on the scale of the toxic loans. The Federal Accounting Standards Board will allow banks to hide what critics say is the real scale of their losses.
Mr Darling said the deal would help British jobs and family finances, even though he was cautious about its possibilities. He told BBC Radio Four's Today programme: "You cannot oversell what happened yesterday, neither can you undersell it."
Shadow chancellor George Osborne said the Conservatives would have to clear up Labour's economic mess long after G20 had left town. Referring to a lack of new money for "fiscal stimulus", he said "the great thing missing from this communiqué is the one thing the Prime Minister lobbied hardest for".
Mr Osborne said the $1trillion being trumpeted comprised loans, credit lines and guarantees, but there was not "a single dollar or a single pound of additional fiscal stimulus".
Critics also pointed out that a chunk of the $1trillion was credit lines to rich nations, including the US, which were unlikely to need the money. Out of the $250billion pledged for trade finance guarantees, less than $25billion was made up of new commitments. The main source was the $100billion for aid for the poorest nations.
The global summitry continued today in Strasbourg as French President Nicolas Sarkozy hosted the Nato gathering amid tensions over Afghanistan.
Mr Brown faced pressure to send more troops as Mr Obama's call for military allies to pull their weight was set to dominate the two-day event.
France - which takes on full Nato membership during the summit after four decades on the fringes - and Germany are also being pressed to increase their contributions.
Strasbourg has been in near-lockdown in the run-up to the summit amid anti-Nato protests. Riot police using rubber bullets and tear gas arrested more than 300 people overnight following disturbances. Some 2,000 troublemakers wearing head scarves and ski masks fought running battles with officers.
As 26 world leaders headed for the city in eastern France today, Russia and the US moved to cut their number of nuclear warheads. Mr Obama and Russian President Dmitry Medvedev announced they aimed to reach a new deal on reducing nuclear arms by the end of the year.
Reader views (13)
Why on earth did buffoon Brown waste so much tax payers money on that G20 circus.
- Peter Noterfed, Paris, France, 06/04/2009 10:14
Report abuse
"He masterminded the G20 and got a $1 trillion deal as a result", Steve Wiltshire.
Only $350 of this is "real" money. The rest is basically being printed. ANY IDIOT CAN PRINT MONEY.
- Chris, Rochester, 05/04/2009 09:33
Report abuse
Keith Price - you really swallowed the Nu Labour mantra (hook line & sinker). Inexperience doesn't imply incompetence. Very few successful PM's had any previous experience as PM. Barak Obama has had NO previous experience of being President before he was elected, and yet he has had a massive positive effect on confidence within the US. Sometimes you just need to recognise that the present incumbent of the post is not up to the job and that we need someone new. Cameron might surprise you if you can take the well-spun Nu Labour blindfold off
- Malcolm, London, 04/04/2009 21:56
Report abuse
Bring on David Cameron and the Conservatives?
Yes, we really would have nothing to worry about with him in charge.
Brown went globe trotting to pull nations together to try to get us out of this "global" recession.
He masterminded the G20 and got a $1 trillion deal as a result.
America is now talking about serious arms reduction with Russia.
What has been David Camerons input?
A promise to freeze your tv licence which will save all of 3 quid.
Yes, we would be better under the Conservatives.
NOT!
- Steve, Wiltshire, 04/04/2009 09:16
Report abuse
Yes Keith, Gordon Brown has shown great skill and experience in how NOT to run an economy. He will go down in history as the biggest one man disaster ever to run this country - bring on David Cameron and the Conservatives.
- Mark Burton, St Ives. Cambs, 03/04/2009 18:09
Report abuse
Nationalism is not, and never has been the same as racism. 'Racism' is used by some as a cheap-shot snide remark at times though.
- Rogan, Irving, 03/04/2009 17:49
Report abuse
Why can he not stage his own festival back home in Scotland and leave us alone. !
Ah! I see racism is still alive and thtiving in Islington, Georgie. What misguided arrogance
- Keith Price, Luton, England, 03/04/2009 16:26
Report abuse
From what I can see, Keith, the main thing that GB is experienced in is failing to live up to his hype, both of self and policies. He is extremely experienced in going back on his word to the people who elected his party based in large part upon those promises. He is a past master of tax and spend socialism, and a world champ in riding rough-shod over the electorate's dreams and aspirations. I don't accuse him of the deliberate destruction of Britain - just that his incompetence is fast heading towards that same result.
You speak, Keith, of Cameron's inexperience. That is yet an unknown factor, true. But GB's 'experience' is more than adequately demonstrated - to his own detriment.
The choice is hope or certainty - and when the certainty is disaster on an epic scale, the hope for better things under Cameron is entirely reasonable.
- Rogan, Irving, 03/04/2009 15:59
Report abuse
Why can he not stage his own festival back home in Scotland and leave us alone. Now would be best for him to retire and let capable men take over. The economic recession is a mess and is getting so much worse he has to be removed from office. MPs are you listening? Please do your job as MPs!!
- Georgie, Islington, London, 03/04/2009 15:22
Report abuse
keith price makes me laugh. What an utterly deluded individual he is. I would not be surprised if he isn't actually just some little puppy dog that works in the lower levels of the so called government...
- Joanna, london, 03/04/2009 14:16
Report abuse
You are an admirer of Gordo . We are not jealous of this Scottish historian talents of fixing the boom and bust or taxing me pensioner in his famous 10p rate of tax. He created the mess in our country, did not keep the Gold for a rainy day (listen to Chilean president )and now he wants to believe that everything bad which he did was due to global factor. So much for maturity. What negotiation. Signing the EU treaty alone in a dark room? Give me Cameron any day.
- Gary Smith, LONDON, 03/04/2009 13:14
Report abuse
No - reuben, Gordon Brown had shown great skill and experienced leadership to bring about a worldwide programme which will bring about economic stability. Why are people so jealous of his talents in comparison to Cameron's inexperience and naivete in political negotiations?
- Keith Price, Luton, England, 03/04/2009 12:44
Report abuse
If anyone even THINKS that the G20 meeting will make a scrap of difference to anything happening in the UK, they are living on a different planet to myself.
Gormless Brown sounded as though he was reading numbers from a telephone directory $100,000,000,000 for this,
$50,000,000,000 for something else $1000,000,000,000 solve all the problems in the world.
FORGET IT FOLKS! THE UK IS FINANCIALLY AND MORALLY BANKRUPT.
FINISHED.
THE END.
AMEN.
- Reuben Camara, Morecambe/Lancaster, 03/04/2009 11:28
Report abuse
