World at risk of 'damaging spiral' of de-globalisation: British
19 Jan 2009 9:58 PM
LONDON, Jan 19 AFP - The world is at risk of a "damaging spiral" of de-globalisation if countries do not co-ordinate their responses to the worldwide economic downturn, British Prime Minister Gordon Brown said on Monday.
Announcing new measures to kickstart lending in the British economy, Brown said: "As important as today's new measures are, it is clear once again that no country can solve what is a truly global financial crisis on its own.
"Unless we come together to address these problems in a co-ordinated way, the world is at risk of a damaging spiral of de-globalising. It is fuelled by a combination of deleveraging and national-only policy solutions."
At a press conference to unveil a second major bank rescue package, Brown called for the "widest possible international agreement", warning against protectionism.
"This financial protection could be every bit as damaging to jobs and businesses in every part of the world, as the protectionism in trade has been in the past," he said.
Last week, Brown, himself a former finance minister, held meetings with the leaders of France and Germany over the international financial crisis, and also met with US Federal Reserve Chairman Ben Bernanke.
Britain, the current president of the G20 group of advanced and developing nations, will host a summit in London in April on the credit crunch and economic downturn, among other subjects.
As well as pressing for co-ordinated international action on the slowdown, Brown has called for major reform of the world's major global financial institutions such as the World Bank and the International Monetary Fund.
Authorities here did not put a total price tag on the new measures announced on Monday, which came after a first package last October. But press reports suggested it was worth some STG200 billion ($A438.16 billion) overall.
Key among the new measures is an insurance scheme to protect banks from so-called toxic assets, announced less than four months after the government pledged STG37 billion ($A81.06 billion) to recapitalise Britain's ailing banks.
