Eurozone countries need to put more money in their own rescue fund before G20 nations can step in to help them, said G20 finance ministers at a summit in Mexico City. Meanwhile, a new World Bank report says China needs to strengthen its private sector and complete its transition to a market economy in order to deal with development challenges.
G20 on Europe, Recovery
Finance ministers and central bank governors of the Group of 20 (G20) nations delayed a decision on providing more resources to the International Monetary Fund (IMF) - until after Euro area leaders agree on the ultimate size of their financial firewall.
Earlier this month, Eurozone leaders also set up a permanent bailout fund of €500 billion. But there are concerns the fund may not be able to rescue a deeply indebted state.
"We have to see the colour of the Eurozone's money first - and quite frankly, that hasn't happened," said British chancellor George Osborne. "Until it does, there's no question of extra IMF money from Britain or probably anyone else."
Any move to boost the Eurozone rescue fund is likely to put more pressure on the leading Eurozone economies. In particular, Germany has so far resisted calls to increase the size of the bailout fund.
But there was also some optimism at the meeting. According to reports, G20 finance officials generally agreed there are signs of "modest recovery" in the United States and European Union economies.
Report: G20 finance ministers ask eurozone to boost rescue fund [BBC, 27 Feb 2012]
Report: G20 chiefs: Europe needs a bigger financial firewall [CNN, 27 Feb 2012]
Report: G20 ministers see signs of modest economic recovery in U.S., EU [Xinhua, 27 Feb 2012]
More Economic Reform Needed in China
China should complete its transition to a market economy through enterprise, land, labour and financial sector reforms, according to a new report by the World Bank and the Development Research Center of China’s State Council.
The report lays out the case for a new development strategy for China to strengthen its private sector, opening markets to greater competition and innovation.
Entitled “China 2030: Building a Modern, Harmonious, and Creative High-Income Society”, the report also recommends steps to deal with the risks facing China over the next 20 years, including a possible hard landing, an ageing and shrinking workforce, rising inequality, environmental stresses, and external imbalances.
Full Report/Executive Summary: China 2030: Building a Modern, Harmonious, and Creative High-Income Society [World Bank Group, 27 Feb 2012]