G20 countries agree on steps to prevent future global meltdowns

G20 countries agree on steps to prevent future global meltdowns

G20 countries on Friday reached a deal to check each other's financial practices and economic policies that may endanger the global economy and send it to another recession.

A joint statement was issued after a series of meetings between finance officials of the G20 countries.

Imbalances in the global economy have been blamed for the most severe global recession in more than 70 years. Some of the issues which are plaguing the world economy include the debt crisis in Europe and issues in foreign trade and currency.

French Finance Minister Christine Lagarde said that the first phase of surveillance involves seven of the G20 countries, but would later expand to cover all members of the Group of 20 economic superpowers, plus emerging economies India and Brazil.

It is unclear whether the Group of Twenty will publicly identify a member economy that fails to correct imbalances. There is no clear-cut mechanism on how to make other countries accountable or change their policies.

Even with a lack of details, the agreement between the G20 countries is being hailed by members as a breakthrough needed to prevent another global downturn. The U.S. home market crash was noted as a good example that should not be repeated elsewhere.

"The subprime crisis in the United States - that's exactly the kind of accident we want to avoid in the future," Canadia Finance Minister Jim Flaherty said. "We want to avoid surprises and that's why we need a mutual assessment system."

G20 countries include major economies the U.S., Canada, Japan, China, France, Saudi Arabia, European countries and emerging markets like Brazil and India.

Posted by James Fried on Saturday April 16 2011, 12:17 AM EST. Ref: AP. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0