SEOUL G20 leaders closed ranks on Friday and agreed to a watered-down commitment to watch out for dangerous imbalances, yet offered investors little proof the world was any safer from economic catastrophe.
After an acrimonious start, developed and emerging nations agreed at a summit in Seoul to set vague "indicative guidelines" for measuring imbalances between their multi-speed economies. But they called a timeout to let tempers cool and left the details to be discussed in the first half of 2011.
European leaders broke away for their own mini gathering in the middle of the summit to discuss a deepening credit crisis in Ireland. Euro zone sources said Ireland is in talks to receive emergency funding from the European Union, in an apparent deja-vu of Greece six months ago.
In a communique signed off at the end of the gathering --the group's fifth since the financial crisis exploded in 2008-- there was a little something for everyone.
Leaders vowed to move toward market-determined exchange rates, a reference to China's tightly managed yuan that the United States has long complained is undervalued.
They pledged to shun competitive devaluations, a line addressing other countries' concern that the U.S. Federal Reserve's easy-money policy was aimed at weakening the dollar.
In a nod to emerging markets struggling to contain huge capital inflows, the G20 gave the okay to impose "carefully designed" control measures.
They also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalization talks launched in 2001.
But there was no mention of Ireland, and financial markets were unmoved by the bland promises to deal with imbalances.
"There is no good reason to think that any country will actually do anything different as a result of the commitments made at the summit," Julian Jessop, chief economist with Capital Economics, said in a research note.
U.S. President Barack Obama said some progress was made.
"The work that we do here is not always going to seem dramatic," he told a news conference after the summit.
"It's not always going to be immediately world-changing. But step by step what we're doing is building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth and reduce some tensions."
BURYING THE HATCHET
After weeks of verbal jousting, the United States and China sought to bury the hatchet over rows about China's "undervalued" currency and the global risks created by the U.S. printing money to reflate its struggling economy.
"Exchange rates must reflect economic realities ... Emerging economies need to allow for currencies that are market driven," Obama said. "This is something that I raised with President Hu (Jintao) of China and we will closely watch the appreciation of China's currency."
The G20's accord sought to recapture unity forged during the global financial crisis two years ago. But deep divides meant leaders could not venture much beyond what was already agreed by their finance ministers last month.
Negotiators had labored until the early hours of the morning to thrash out an agreement their leaders could all endorse, despite sharp disagreements that were on public display in the days before the meeting.
"This hasn't been a love-fest," an official who participated in the negotiations said.
In particular, the leaders were unable to reach a consensus on how to identify when global imbalances pose a threat to economic stability. They merely committed to a discussion of a range of indicators in the first half of next year.
Tim Condon, head of research at ING Financial Markets in Singapore said it was "hard to disagree" with the vows of the leaders but they had fallen short of the progress hoped for going into the summit.
"They decided just to put down a lot of laudable objectives as the conclusion of the meeting and hope that they can do better, that more can be accomplished in future meetings," he said.
The G20 has fragmented since a synchronized global recession gave way to a multi-speed recovery. Slow-growing advanced economies have kept interest rates at record lows to try to kick-start growth, while big emerging markets have come roaring back so fast that many are worried about overheating.
(Additional reporting by Patricia Zengerle, Keith Weir, Gernot Heller, David Lawder and Alister Bull; Writing by Emily Kaiser and Walter Brandimarte; Editing by Andrew Hay)