Rallying behind a common goal to arrest economic imbalance and avert future crisis, the G20 have reached a compromise on certain set of indicators.
At the closing of the G20 meeting in Paris this week, leading global economies agreed on a deal after “frank, sometimes tense” negotiations, according to Finance Minister Christine Lagarde of France, the current G20 chair.
The consensus was reached following intense discussions that led to the softening of criteria on account surpluses, in consideration of China’s desire to get on board, news reports have cited.
The broader aim in reaching a deal is to ensure coordination of policies and prevent another economic crisis in the future, sources added.
Ms. Lagarde bared that lengthy discussions ensued throughout the meeting as members decide on the indicators to be used, after reports that China, which has been scored for its currency policy, argued against inclusion of some economic indicators.
“The negotiations were frank, sometimes tense, and led to a final compromise which cannot attribute to any one delegation but which I can say represents a spirit of compromise and of ambition,” Ms. Lagarde told a news conference after the meeting.
Among the indicators identified include current account balance, trade balance, public debts and deficits as well as private debt levels and savings rates.
With said indicators agreed upon, the next step for G20 is to decide how to assess these indicators to determine when a trade imbalance, for instance, becomes a problem. The group expects to accomplish this by April.
Stressing that the next steps could prove harder for the group to meet, observers said G20 members also need to decide on what action to take when a serious imbalance is identified.
While the said indicators were not binding targets, these were nevertheless crucial in the drafting of guidelines for coordinated policies, Ms. Lagarde further stressed.