G-20 finance officials: Too early to end stimulus

By JANE WARDELL

AP Business Writer

ST. ANDREWS, Scotland — Finance officials from rich and developing countries pledged Saturday to maintain emergency support for their economies until recovery is assured and committed themselves to urgent action on tackling climate change.

U.S. Treasury Secretary Timothy Geithner said the "process of growth is now beginning" but warned that ending stimulus measures too early would be damaging to the economy.

He said U.S. jobs figures out Friday showing unemployment at a 26-year high of 10.2 percent "reinforced that this is still a very tough economic environment."

"If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater," Geithner said.

The statement from Group of 20 finance ministers and central bankers at the end of their meeting in St. Andrews, Scotland said that economic and financial conditions have improved.

But they stressed that recovery is "uneven and remains dependent on policy support" and that high unemployment remains a major concern.

The statement smoothes over divisions among officials about how best to secure future global growth. Host country Britain, still mired in recession, wants to continue international effort to support a still fledging recovery, while other G-20 nations, including the United States, Japan and Germany, have been more eager to talk about ending measures to boost growth.

The G-20 officials - representing around 90 percent of the world's wealth, 80 percent of world trade, and two-thirds of the world's population - also commited to take action to tackle the threat of climate change and work towards "an ambitious outcome" at a major UN conference in Copenhagen next month.

Officials are considering a finance package to help poorer nations develop green industries and adapt to climate change.

The issue's priority on the agenda here reflects concern that nations will fail to agree in Copenhagen on Dec. 6 on a successor to the Kyoto treaty limiting carbon emissions. The EU has said that there should be a euro100 billion annual package of public and private finance by 2020 and has urged the U.S. to lay out its position.

But the Obama administration has been preoccupied with prickly domestic issues such as healthcare.

Danish Prime Minister Lars Loekke Rasmussen said earlier Saturday it was now "obvious" that the December climate change talks "can't achieve the final result in terms of the new legally binding treaty which goes into all details."

But he said finance ministers held the key to a final deal, urging them to come up with concrete proposals on funding to help developing nations tackle and cope with a warming climate.

The climate issue has been the focus of protests around St. Andrews. A small group of protesters blocked the coastal road Friday night between the town and the nearby resort where the meeting was held by chaining themselves together. On Saturday around 200 demonstrators gathered at West Sands beach on Saturday with a group dressed as bankers sticking their heads in the sand.

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