Oh Korea! G20 finance ministers go back to business as usual
The G20 Finance Ministers meeting this weekend in Busan, South Korea has just decided to turn its back on the unemployed and the poor, and retreat to the economic orthodoxies that led to the last recession and the Great Depression of the 1930s. Chris Giles, writing for the Financial Times, reports that the communique just issued abandons the idea of a co-ordinated bank levy (although allowing it to go ahead in individual countries), and abandons support for fiscal stimuli, preferring instead to advocate public expenditure cuts . The market has won, and we will all suffer an age of austerity as a result. The only strongly dissenting voice was the US, which is still worried about growth. US Treasury Secretary Tim Geithner wrote to the G20:
“Concerns about growth as Europe makes needed policy adjustments threaten to undercut the momentum of the recovery,” he wrote, adding that fiscal tightening won’t “succeed unless we are able to strengthen confidence in the global recovery.”
Ahead of the summit, the International Trade Union Confederation called for no withdrawal of fiscal stimuli (ie no to cuts in public expenditure) until the unemployment crisis is over, as well as re-regulation of the finance sector and a financial transactions tax, and greater transparency and consultation with civil society on behalf of the Financial Stability Board.