Gordon Brown's G20 summit risks global financial meltdown

Gordon Brown's flagship G20 economic summit risks disappointing financial markets and sending shares plummeting worldwide, Lord Malloch Brown has said.

By James Kirkup, Political Correspondent
Last Updated: 10:16PM GMT 10 Mar 2009


Lord Malloch Brown: His remarks echo the private concerns of other ministers who worry that Mr Brown has raised expectations for what the summit can actually deliver to dangerous heights Photo: AFP

Lord Malloch-Brown, a Foreign Office minister involved in the preparations for next month's London summit of the G20 countries, said that meeting must produce a substantive plan to rescue the world economy or there will be "disastrous" financial consequences.

Mr Brown "cannot afford" for the summit to fail, he said.

His remarks echo the private concerns of other ministers who worry that Mr Brown has raised expectations for what the summit can actually deliver to dangerous heights.

Mr Brown has repeatedly spoken of the importance of the one-day summit, saying it must forge a "global new deal" of co-ordinated financial regulation and economic policies, and the reform of international financial institutions like the International Monetary Fund.

The stakes at the April 2 summit are so high that failure would have dramatic repercussions, Lord Malloch Brown said.

He said: "If we get anodyne committee conclusions with all the substance taken out of them, the markets on April 3 will be something of a disaster zone, I have no doubt."

Mr Brown last week claimed there is "an emerging consensus" around his plans. But there are signs that the G20 countries may struggle to agree on substantive action, and President Barack Obama last week pointedly refused to endorse Mr Brown's "global new deal."

The US wants the summit to focus on more fiscal stimulus policies to boost economic growth, while European countries, especially Germany, are hesitant and want to focus on financial regulation.

Mr Brown is staking both his political and economic credibility on the London summit. Some aides even hope that a successful meeting could eventually allow him to recreate the "Brown bounce" that lifted Labour's poll ratings last autumn when he took action to bail out British banks.

"None of these leaders who assemble in London can afford this Summit to fail, the issues have become just much too immediate and much too significant," Lord Malloch Brown said.

The peer, a former United Nations chief personally recruited to Government by Mr Brown in 2007, has a reputation for plain speaking. On Monday, he became the latest minister to call for an explicit government apology over the policies that led to the current recession.

George Osborne, the Tory Shadow Chancellor said the Prime Minister should take Lord Malloch Brown's comments as a warning about the dangers of raising expectations for the London meeting.

He said: "The Government's obsession with spin continues to risk undermining any effort to get out of this crisis. This makes them part of the problem, not the solution."

Alistair Darling, the Chancellor, on Tuesday added a new goal to the G20 process, asking western European countries to pledge more money to the IMF so it can support countries in eastern Europe.

Many eastern European economies are suffering amid the global slowdown, raising questions about the union's cohesion. EU leaders last week rejected a Hungarian appeal for a 180 billion euro rescue package for eastern economies.

Speaking at a summit of EU finance ministers, Mr Darling said that wealthier countries must help their poorer neighbours.

He told Radio 4: "If we don't sort these problems out and try to resolve them, it will affect us, because our well-being, our wealth as a country, depends on the health of Europe,

http://www.telegraph.co.uk/finance/fina ... ldown.html