Says it would be ‘over exuberance’ to expect G20 summit to resolve Greek crisis.
As the G20 leaders closed their two-day summit here with a nine-point communique, the mood was one of disappointment as a way forward from the euro zone crisis was nowhere in sight. After spending a good part of their time discussing the Greek debt situation, all that the leaders said was they welcomed the European stand of restoring debt sustainability for Greece and building firewalls to avoid a contagion.
In a press briefing later, Prime Minister Manmohan Singh did acknowledge the fact that to expect the summit to solve the three-year-old problem of the euro zone would be “an act of over exuberance”. Expressing India’s disillusionment with a euro zone that had monetary integration but no fiscal integration, Singh said it was important for India the European crisis was resolved as the region was its biggest trading partner. He said the G20 would ensure that adequate resources were available with the International Monetary Fund (IMF).
He said the IMF should keep the situation under a close watch and India would support it in playing an appropriate role to backstop the preventive steps taken within the euro zone.
The G20 leaders said additional resources for the IMF should be mobilised in a timely manner. “We ask our finance ministers by their next meeting to work on deploying a range of various options including bilateral fund contribution to the IMF, SDR (special drawing rights), and voluntary contribution to an IMF special structure such as an administered account,” said the communique.
Under the theme of a global strategy for growth and jobs, the G20 leaders agreed steps should be taken to address short-term vulnerabilities and strengthen medium-term foundations for growth.
The communique called upon the IMF to take further action for making the SDR basket more reflective of the role of various currencies in the global trading and financial system. “The composition of the SDR basket will be reviewed in 2015 or earlier as currencies meet the existing criteria to enter the basket,” it said.
In a signal to nations resorting to competitive devaluation of currencies, the communique said there should be a move towards more market-determined exchange rate systems to avoid persistent exchange rate misalignment.
