Downing Street Says » Global Economy

» Wednesday, March 11, 2009

Global Economy

Asked if the Germans needed to do more in terms of addressing the global financial system, the PMS said that there was an ongoing discussion about what all countries needed to do as part of the ongoing agenda for the G20, and that s what the Prime Minister would be discussing with Angela Merkel at their meeting.

Asked what the Prime Minister thought about CBI s comments in the Financial Times that the G20 meeting would focus on trivial matters, the PMS said that we did not accept the analysis. The G20 would address issues around global economic policy and reforming the global financial system, as President Obama had been saying today. That meant dealing with some of the cultural practices that had developed in banks including the remuneration system and the incentives that they generated. Part of it was also ensuring that the global net for regulation was spread as widely as possible, which included some offshore centres and tax havens.

Asked about the Ecofin meeting yesterday, the PMS said that significant decisions had been made to enable member states to reduce rates of VAT below 15% in some sectors in order to stimulate demand. We were seeing an increasing degree of consensus in Europe, and the world, in terms of the reaction needed to address the global economic downturn. The reason we chose VAT was because it was a quick and effective way of getting money into peoples pockets.

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