The leaders of the world’s major economies embarked on the final day of the G20 summit yesterday determined to kickstart growth and pull the eurozone back from the brink of disaster.
European members were under extraordinary pressure from their international counterparts to loosen the straitjacket of their austerity programs and to allow the European Central Bank (ECB) to open the lending floodgates.
And, beyond the summit conference center in the Mexican resort of Los Cabos, bond markets jacked up rates on Spanish and Italian debt amid self-fulfilling fears that the debt crisis that sank Greece was spreading once again.
Photo: Reuters
German Chancellor Angela Merkel, the driving force behind the eurozone’s determination to privilege deficit busting over stimulus spending, has publicly stood her ground, although US officials say her position is softening.
A draft version of the G20 final statement, which was to be finalized and published by the leaders yesterday, suggested that a form of words would be found that would commit the leaders to a pro-growth agenda.
“All G20 members will take the necessary actions to strengthen global growth and restore confidence,” it said, vowing that eurozone members would safeguard the stability of the single currency in the face of volatile markets.
The version seen allowed no hint that Merkel or her allies might crumble and allow the ECB to pump out cash or to pool German debt with that of the weaker eurozone members to create low-interest eurobonds.
However, it contained a phrase that opened the possibility of more lending and spending if the European economy continues to struggle.
“Should economic conditions deteriorate significantly further, those countries with sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand,” the draft reads.
Officials from eurozone countries also patted themselves on the back for remaining more or less united in the face of pressure from the US, emerging powers, Britain and a skeptical media.
EU Commission President Jose Manuel Barroso bristled at hostile questioning over why his rich continent needed so much support from abroad, declaring: “We are certainly not coming here to receive lessons from nobody.”
US President Barack Obama called for Greece to be given more time to get its affairs in order, after parties committed to honoring the terms of its debt write-down agreement won a majority of seats in Sunday’s parliamentary elections.
However, Merkel remained unmoved.
“Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed on,” she told reporters.
Progress was made in Los Cabos in boosting the resources available to the IMF to provide a firewall to protect debt-ridden states from the threat of default.
IMF Managing Director Christine Lagarde thanked emerging powers, led by China, for pledging enough to bring her pool for emergency loans up to US$456 billion in exchange for a greater say in IMF affairs.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique