Byline: Sam Fleming
LEADERS of the G20 stood up one after another in the cavernous Excel Centre yesterday to hail the 'historic' and 'unprecedented' agreement that had emerged from its meeting rooms. Even Nicolas Sarkozy, who had earlier threatened to storm out of the summit if he didn't get his way, said the outcome went 'beyond what could have been imagined.'
Given the build-up, the politicians could hardly afford to be modest. Lord Mandelson said it all when he told the BBC Gordon Brown had been 'excessively ambitious' before the G20 - hastily adding this was no bad thing.
The Prime Minister and many of his counterparts allowed expectations to reach stratospheric levels over recent weeks, so it was crucial for market confidence that it did not turn out to be a damp squib.
There was genuine progress in three significant areas in yesterday's G20 communique - International Monetary Fund reform, trade flows, and some aspects of financial regulation. On the first, the $750bn boost to IMF resources marks a real step forward in its ability to deal with emerging market crisis - not to mention potential funding gaps in developed nations.
On top of this, there is to be a $250bn boost to the Fund's Special Drawing Rights - a quasi-currency held by IMF members. This is akin to a global 'quantitative easing' similar to that being pursued by the Bank of England.
It also points the way to a significant increase in the IMF quotas of countries like China, giving them a major voice, and therefore stake, in world economic policy.
Ray Barrell of the National Institute of Economic and Social Research said: 'In the current crisis the IMF has a much more important role to play than it has for 20 years. Increasing its resources is an important step forward.' Other analysts welcomed some modest progress made on trade.
The introduction of a new $250bn trade facility to help flows of products and services around the world was well received by some.
Exporters have been struggling to obtain credit to finance their overseas sales, so the G20's attempt to address the export collapse is 'significant', according to ING analyst Chris Turner.
'This is a very big issue,' he says. …