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The world's economic crisis response team will grapple with the prospect of more market volatility on Friday as finance ministers and central bankers gather in Moscow to chart a course towards recovery.
The Group of 20, a forum that took the lead in the 2008-09 financial crisis, now faces a multi-speed global economy in which only the United States appears to be nearing a self-sustaining recovery.
China, for years the engine of global growth, is suffering a slowdown amid doubts over the stability of its financial system, Japan has only recently embarked on a radical fiscal and monetary experiment, and Europe's economy is more stop than go.
Collective efforts to balance the prospect of a withdrawal of US monetary stimulus against expansionary policies elsewhere evoke visions of passengers rushing from port to starboard to stabilise a listing ship.
"We used to believe that as soon as the economic situation stabilises ... we will have less volatility in financial markets and currency markets," Russia's G20 summit coordinator, or 'sherpa', Ksenia Yudayeva, told Reuters.
"The events we just saw have proved that we will not necessarily have less volatility - we will probably have quite a lot," she added.
Chairman Ben Bernanke's guidance in May that the Fed may start to wind down its $85 billion in monthly bond purchases - intended to ease the flow of credit to the economy - triggered a steep sell-off in stocks and bonds, and a flight to the dollar.
Investors were calmed by dovish testimony to Congress this week by Bernanke, who is not coming to Moscow. Yet emerging markets - especially those that depend on commodities or that have external deficits - have underperformed.
JOBS COMMITMENT
The United States is beating its fiscal targets thanks to improving growth and Washington has urged the G20 to prioritise growth over fiscal consolidation sought by Europe's largest economy, Germany.
G20 labour ministers, who met on Thursday, will hold a joint session on Friday with finance ministers, putting the jobs crisis in Europe - where youth unemployment is nearly 60% in debt-strapped Greece and Spain - at the centre of the debate.
"We've been making the point at these meetings that Europe does need to look at what it can do to get the engine of growth moving again," US Treasury Secretary Jack Lew told Bloomberg Television. "The world needs Europe to grow."
Lew also said it was critical for China to speed reforms towards demand-led growth. Other G20 nations, led by Japan, are seeking greater clarity from China on how strains in its 'shadow' banking system will play out.
The European Union's employment commissioner, Laszlo Andor, shared Lew's prescription for recovery, telling Reuters that investment in jobs was vital for maintaining social peace and emerging from years of austerity.
"There has been a very dynamic and dangerous polarisation inside the European Union," Andor said in an interview.
"If in the name of competitiveness and internal devaluation you just compress wages constantly, you also kill demand and you can kill the recovery," Andor said. "We are looking for a more of a demand-driven recovery.
G20 ministers will also review a report by the Organisation for Economic Co-operation and Development on measures to stop big companies shifting profits into tax havens.
PROTEST IN MOSCOW
Russia, the first big emerging nation to host the annual presidency of the G20, finds itself in an awkward political spot following the flight of former US spy agency contractor Edward Snowden to Moscow.
G20 delegates arriving at Sheremetyevo airport may not have bumped into Snowden, who has requested asylum in Russia, but they did meet a protest in Moscow over the jailing on Thursday of a prominent Russian opposition politician.
Alexei Navalny, who organised protests against President Vladimir Putin's election for a third Kremlin term last year, was sentenced to five years in prison for theft in a case that drew international condemnation as politically motivated.
Officials checking in to the five-star Ritz Carlton hotel on Moscow's central Tverskaya Street paid little attention to thousands of Navalny supporters protesting outside, in keeping with a G20 tradition of keeping politics and policy separate.
"The rally and the traffic jams are causing meetings to be postponed," said one European diplomat. "But we fully understand the democratic right to protest."
