| ST PETERSBURG, Russia, June 7
ST PETERSBURG, Russia, June 7 The Group of 20
nations is intensifying its debate on how to withdraw the fiscal
and monetary stimulus measures that developed nations have used
to counter economic recession, Russia said on Friday.
So-called "spillover effects" from expansive policies have
also risen to the top of the agenda, Finance Minister Sergei
Storchak said on Friday, after G20 finance talks held against a
backdrop of sharply increased global market volatility.
"The theme of exit strategies has returned," Storchak told
Reuters after deputy finance ministers and central bankers met
in St Petersburg, where President Vladimir Putin will host a
leaders' summit in September.
"This theme was raised in the context that countries'
policies should be in line with the expectations of market
Russia's turn at the helm of the Group of 20 has coincided
with an attempt by Japan's new prime minister, Shinzo Abe, to
shake the world's third-largest economy out of a two-decade-old
deflationary slump with expansive fiscal and monetary policies.
At the same time, first indications that the Federal Reserve
may wind down its bond-buying programme as the U.S. economic
recovery gains hold have caused huge swings in currency, bond
and stock markets.
G20 finance ministers meeting in Moscow in February gave
Tokyo a free pass, taking the view that 'Abenomics' did not
amount to an attempt to manipulate the yen, which has lurched
higher this week after earlier sliding below 100 to the dollar.
Yet Storchak's comments reflected Moscow's concern, shared
in particular by China, that newly-minted money that has flooded
into emerging markets as a result of so-called quantitative
easing, could turn tail as U.S. monetary conditions normalise.
"The debate on spillover effects has become much more active
than it was in the spring," said Storchak.
"That means ministers will have to pay greater attention ...
to assess their impact," he added. "Policy measures should be
based on a proper impact assessment."
Storchak confirmed that G20 would not set binding government
borrowing targets in September. The group, which accounts for 90
percent of the world economy, has at Washington's behest backed
away from the so-called Toronto goals set in 2010.
"Those who said it was worth keeping and developing the
Toronto goals have softened their position, while those who
think that there is no point in adopting such commitments at all
aren't insisting as firmly," said Storchak.
"The ideology of financial stability should be enshrined in
the St Petersburg agreements - although there probably won't be
G20 finance ministers and central bank meet in St Petersburg
on July 19-20 to make final summit preparations.