core sector communique

Group of 20 Advanced Economies Plans Economic Recovery

By MacKenzie C. Babb

Staff Writer

Washington - The Group of 20 advanced economies have worked together to diminish risks to the global economy, but still face significant economic challenges to full recovery, according to U.S. Treasury Secretary Timothy Geithner.

"Our focus now is on reforms that will help create a stronger foundation for future growth and broaden economic opportunity," he said. "Our strategy is to combine investments and reforms in education, innovation and infrastructure with tax reforms and savings to restore long-term fiscal sustainability."

The secretary spoke February 26 at the G20 meeting of finance ministers and central bank governors in Mexico City. He commended "encouraging signs of resilience" in economies around the world. Talks at the February 25-26 meeting focused on three key issues: Europe and the economic outlook, global financial reform, and Iran and oil markets.

On Europe, Geithner said the group was encouraged by recent progress on the region's path to financial recovery.

Mexican President Felipe Calderón, who spoke to the ministers February 25, also praised European leaders for implementing new reforms to enable countries in the region to reduce their deficits.

"I am pleased to see that the Euro zone countries are gradually coming up with the required solutions" to strengthen the European economic recovery, he said. "We know that much remains to be done, but these are obviously steps in the right direction."

Geithner said that beyond Europe, steps that many emerging economies have taken during the past several months have helped to support the global economic recovery. He encouraged countries to continue to enact policies to reinforce economic expansion and domestic sources of growth.

On Iran and oil, Geithner said he had a "series of encouraging conversations with countries planning to significantly reduce imports from Iran." He said the G20 partners are cooperating effectively to ensure that banks around the world "cease transactions with the Central Bank of Iran and that Iranian banks find it harder than ever to facilitate Iran's illicit nuclear activities or to help Iran evade sanctions."

The secretary said he was also encouraged by the group's cooperation to ensure alternative sources of oil from major producers to help offset reductions in exports from Iran.

Regarding financial reform, Geithner said the group reviewed the global effort to strengthen safeguards against future risks in the financial system. He said they made important progress on tougher capital standards, discussed strategies for oversight and transparency, and shared information on how to manage financial crises.

The finance ministers' meeting followed a meeting of the G20 foreign ministers in Los Cabos, Mexico, a week earlier. Both meetings came in preparation for the group's annual leaders' summit in Los Cabos in June.

(This is a product of the Bureau of International Information Programs, U.S. Department of State.)