G20 meeting in London – an attempt to save the world from the recession?

The world G20 leaders met in London on the 2nd & 3rd of April to discuss the current economical situation, and to come up with a good set of solutions.

From the homepage you can find the decisions that the leaders made and signed on 2 April 2009. Global plan for recovery and reform: the Communiqué from the London Summit includes 29 points.

I will point out the most interesting ones, but you can check out the entire list here. Overall the list includes pledges and the most critical areas that have to be dealt with during “the greatest challenge to the world economy in modern times”.

Point 3 states that wealth is inseparable, but needs long-term global planning for successful sustain.

Point 4: We have today therefore pledged to do whatever is necessary to:

• restore confidence, growth, and jobs;
• repair the financial system to restore lending;strengthen financial regulation to rebuild trust;
• fund and reform our international financial institutions to overcome this crisis and prevent future ones;
• promote global trade and investment and reject protectionism, to underpin prosperity;
• andbuild an inclusive, green, and sustainable recovery.

By acting together to fulfil these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future.

Point 5: The agreements we have reached today, to treble resources available to the IMF to $750 billion, to support a new SDR allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs, to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy. Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale.

It seems like the leaders know where the main problems lay, and have thought through how to spend the financial resource in order to get the economy up and running again. For some reason I really have hope in the G20 and its new Action Plan.

Let’s give the economy a facelift!

Alan Schein / zefa / Corbis

Five Reasons for Economic Optimism

Seriously, there are reasons for optimism — if you're willing to look really, really hard...

by Justin Fox, Time Magazine

1. The Stock Market Is No Longer Overpriced – “The Dow's descent below 7,000—for the first time since early 1997—was greeted with much wailing on Wall Street and in the media.” But this means that the stocks are just about as equally priced as they can be. The same principle did raise the real estate prices through the roof in Estonia as well. JUSTIN FOX says that buying and selling houses does not bring prosperity anymore; work does. But we only just figured that out now.

2. The Government Is On The Case – “Don't laugh. The Treasury Department and the Federal Reserve and the White House and Congress really are all working to fix this mess. They're making lots of mistakes. They're doing some things too quickly and many things too slowly.” Even though many of the Eastern European countries are really struggling for survival, the governments have had to work extra-extra hard in order to not let the economy collapse. The state budgets are cut, the opposition parties constantly criticize basically anything that the government proposes as a solution and meanwhile thousands of people are losing their jobs. When (not if) we get through this mess – we should be smarter and stronger altogether.

3. Consumers are Adjusting to the New Economic Reality — and Fast –

Buying, buying, and buying. That is what the Americans and the Europeans cannot afford anymore. The overconsumption led us to the crisis but will prove to be the best lesson in saving. It will teach consumers not to buy things they’ll never ever use anyhow. A good lesson, aye!

4. Reinvention and Change are What the U.S. is All About – “And as the economic crunch goes global, it is becoming increasingly clear that the U.S.—despite being the epicenter of the meltdown—will be far from the worst hit.” Things are not that sunny in Europe though. Many eastern European countries have received help from the International Monetary Fund (IMF) and some even from neighbor countries. For instance Sweden has come to the rescue of Latvia.

5. O.K. I Couldn't Think of a Fifth Reason – “I also have to admit that as I look back at the first four reasons, they're all exercises in either

a) finding silver linings in really bad news or

b) wishful thinking that has yet to be backed up with hard evidence.”

The only thing we can do during this continuous economical downfall is to have faith in politics. Yes, politics! You didn’t misread. Fortunately or not, it seems to be the only power strong enough to survive a catastrophe like this. Fingers crossed, everyone!