The G20 Finance Ministers and Bank Governors Meeting, which is being held in St. Andrews, an ancient city of Scotland, will focus on the "exit strategy" as the global economy gradually shows positive signs.
This is the third time for them to meet in the UK. They are expected to agree to maintain their pledge to keep economic life- support packages in place until recovery is assured and put more content to the new "framework
for strong, sustainable and balanced growth", which was inked at the G20 summit in Pittsburgh in September.
In order to prevent the global economic crisis from taking place again, the G20 finance ministers and central bank governors will further emphasize the importance of co-ordinating fiscal and monetary policy to avoid the creation of new imbalances between different countries.
Considering there are still a lot of uncertainties in the process of global economic recovery, these policy-makers will again have a consensus that it is still too early to start withdrawing the extraordinary life-support measures. U.S. Deputy Treasury Secretary Neal Wolin recently said that there was still a need in the United States and elsewhere to continue to be pushing toward stimulus in the near term.
However, divergence on how long the stimulus should continue will likely exist among the G20 finance ministers and central bank governors. The
world's largest economy, the United States, has pulled out of the recession, posting a growth of 3.5 percent in the third quarter. However, the UK is still in recession. Till the third quarter, the country has contracted for six consecutive quarters, the longest recession record.
Anyway, these policymakers will further emphasize the importance of co-operation and co-ordination. In a letter to fellow finance ministers ahead of their gathering, UK Chancellor Alistair Darling said, "As the process of recovery continues, it is vital that we co-operate more effectively in managing the world economy, recognizing that our economies
are highly inter-dependent. " Another key theme of the meeting is that the finance ministers and
central bank governors will be trying to secure a deal on climate change finance ahead of the UN climate change conferences, which is to be held in Copenhagen in December. But probably no concrete results could be achieved in the climate change finance.
In addition, how to reform the international financial system and financial institutions will also be put on the table for discussion. Though
the international financial system is gradually stabilizing, developing nations are worrying about the capital flows into their economies, which are resulting from relatively low interest rates in the most developed economies and leading to over-valued currencies.
The two-day G20 meeting is chaired by UK Chancellor Alistair Darlingand attended by finance ministers and central bank governors from the United States, Europe's largest economies and those of China, Japan, India, and Russia and so on.