* G20 vow to move "more rapidly" toward flexible forex rates
* Leading economies cite China's "determination" on currency
* G20 ready to give IMF more resources, Italy under
By Daniel Flynn and Noah Barkin
CANNES, France, Nov 4 Group of 20 leaders
meeting in Cannes adopted stronger language on currencies than
they have at previous summits, agreeing on Friday to accelerate
a move towards market-driven exchange rates and mentioning China
for the first time in that context.
In their final communique, G20 countries also said they
stood ready to provide additional crisis-fighting resources to
the International Monetary Fund (IMF) and applauded a decision
by Italy to allow oversight of its economic reform programme.
Beijing has long faced pressure from western nations to
allow its yuan currency to float more freely but has refused to
bow to those demands and resisted attempts by the G20 to spell
out concerns about its policies.
The statement did not criticise China, but did make a clear
link between the country and a G20 drive to make currencies more
"We affirm our commitment to move more rapidly toward more
market-determined exchange rate systems and enhance exchange
rate flexibility to reflect underlying fundamentals, avoid
persistent exchange rate misalignments and refrain from
competitive devaluation of currencies," the G20 communique said.
In a separate "action plan" to boost growth and jobs, the
G20 welcomed China's determination to increase exchange rate
flexibility "consistent with underlying market fundamentals" as
well as recent changes to Russia's currency regime.
It was the first time that the G20 published an "action
plan" with specific national commitments to boost growth and
rebalance the global economy.
The United States, for example, committed in the draft to
put its debt on a declining path relative to gross domestic
product no later than the middle of the decade.
Emerging market economies and Germany promised to implement
measures to boost domestic demand-led growth, a move long pushed
by the United States and Britain.
French President Nicolas Sarkozy, who faces a tough
re-election campaign in 2012, had hoped to use his G20
presidency to pursue an ambitious rethink of the global monetary
But he has had to rein in his ambitions as the euro zone's
debt crisis has blown up, threatening to plunge the global
economy back into recession.
The European Central Bank cut interest rates on Thursday
for the first time in over two years, saying the 17-nation
currency bloc could suffer a "mild recession" in the latter part
of the year. A day earlier the U.S. Federal Reserve slashed its
forecasts for growth in the world's largest economy.
"Since our last meeting, global recovery has weakened,
particularly in advanced countries, leaving unemployment at
unacceptable levels," the G20 communique said.
"In this context, tensions in the financial markets have
increased due mostly to sovereign risks in Europe. There are
also clear signs of a slowing in growth in the emerging
On the regulatory front, the G20 reaffirmed a commitment
first made at a summit in Washington at the height of the global
financial crisis in late 2008 to ensure that all financial
markets, products and participants were regulated or subject to
The Financial Stability Board, a task force set up in 2009
to re-examine global regulations, published a list of 29
systemically important financial institutions and the G20 said
it had agreed "comprehensive measures" that would ensure no bank
was judged "too big to fail".
The summit was overshadowed by political turmoil in Greece,
where lawmakers were due to hold a confidence vote on the
government of Prime Minister George Papandreou later on Friday.
Two years into a crippling European debt crisis that leaders
have warned threatens the global economy, the other big concern
is Italy where confidence in Prime Minister Silvio Berlusconi's
ability to rein in high debt levels is fading.
In an unusual move, Berlusconi agreed at the summit to allow
IMF supervision of his reform programme. Together with the
European Commission, the IMF is to publish quarterly reports on
Italy's economic progress.
"I expect that we can be on the ground and running before
the end of the month," IMF Managing Director Christine Lagarde
told reporters in Cannes.