Sunday, July 24, 2016

SUMMARY 1 -The G20 pledges to support growth after the Brexit – Boursorama

 * The impact of Brexit  dominated the meeting of Chengdu * The G20 will  use “all the levers” to help growth *  It recognizes that growth must be widely shared by  William Schomberg and Elias Glenn CHENGDU, China,  July 24 (Reuters) – Finance ministers and  central bankers of the Group of 20 leading  economies in the world Sunday renewed their  commitment to support growth and to better share  the fruits, after a meeting dominated by the  impact the exit of Britain from the European Union  and by the risk of protectionism. Philip Hammond,  Britain’s new finance minister, assured his  colleagues gathered in Chengdu, Sichuan province,  the uncertainties around the “Brexit”  begin to fade after London has presented his  vision of relations future with Europe in the  coming months he hopes. But he acknowledged that  volatility in financial markets could persist  during the negotiations that will last several  years. “The uncertainty will start to fall  when we are able to say clearly what kind of  arrangement we plan with the European  Union,” he told the press. “If our EU  partners to respond positively to such a vision  – but it will obviously be subject to  negotiation – then we can agree on where we  want to go (…) and I hope it will send a  reassuring signal to business and markets. ”  In the communiqué issued at the end of the  two-day meeting, the G20 ministers recognize that  Brexit which dominated discussions had added  uncertainty to the global economy whose growth is  “lower than what would be desirable. ”  However, they consider the Member States  “well placed to address proactively the  potential economic and financial  consequences.” “In light of recent  developments, we reiterate our determination to  use all policy levers – monetary, budgetary  and structural – individually and  collectively to achieve our goal of a strong,  sustainable, balanced and inclusive,” the  communicated. On Tuesday, the IMF has revised down  its forecast for global growth because of  uncertainties Brexit. While monetary policy had  dominated past meetings of central bankers of the  G20, the subject has been little discussion this  time and the discussions focused on growth, said  Governor of the Bank of France François Villeroy  de Galhau. The US Treasury Secretary, Jack Lew,  reported a broad consensus around the need for  stronger growth. Easy to reach consensus, has  mischievously noted Chinese Minister Lou Jiwei,  since the current growth is too low. Overcapacity,  A GLOBAL PROBLEM The specter of protectionism, not  only awakened by the Brexit but also by the  campaign promises of the Republican candidate  Donald Trump in the US, was also invited to the  G20 meeting. “There are not only the Brexit  but also other risks to growth, and there has been  much debate on the need to be alert to other  developments such as terrorism, geopolitical risks  or stream refugees, “said an official of the  Japanese Ministry of Finance. “Many concerns  have been expressed about protectionism.” In  the communiqué, the G20 stressed “the role  of free trade and a strong international and safe  trade system to promote an inclusive global  economic growth,” that is to say generating  a high-employment, and he is committed to  producing new efforts to “revitalize global  trade and increase investment.” He  acknowledges the difficulties caused by industrial  overcapacity, particularly in the steel sector and  the negative implications for trade and workers.  Overcapacity “is a global problem that  requires collective responses,” the  statement said. “We also recognize that  subsidies and other support provided by  governments or public institutions can cause  market distortions and contribute to situations of  overcapacity, so it requires attention,” he  added. The risk of competitive devaluations were  also discussed and the ministers again pledged not  to use it, but this, although mentioned in the  press, seems to have held an important place in  the discussions that the previous G20 meeting in  February in Shanghai. Taro Aso, Japanese Minister  of Finance, has however publicly worried about the  depreciation of the Chinese yuan. “Whether  up or down, too rapid movement of the yuan are not  desirable,” Has he told reporters.  “Besides the weakening of the yuan is not  necessarily good for the Chinese economy: it may  be good for exports but adds the cost of  imports.” Haruhiko Kuroda, the Governor of  the Bank of Japan has ensured that participants  had not discussed an appeal to the  “helicopter money”, colorful term to  describe the direct distribution of money to  households to stimulate growth and inflation.  “This G20 meeting did not discuss things  considered the helicopter currency, and this  helicopter currency expression has also not been  used at all,” he has said, sweeping again  the speculation about a possible claim of Japan to  this extreme measure. (With Jan Strupczewski,  Gernot Heller, Tetsushi Kajimoto David Lawder and  Kevin Yao, Julie Carriat and Veronique Tison for  the French service) 


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