| CANNES, France
CANNES, France 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 toward 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 program.
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 criticize China, but did make a clear link between the country and a G20 drive to make currencies more flexible.
"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 system.
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 markets."
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 oversight.
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." [ID:nL6E7M41J5]
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 program. 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.
(Additional reporting by Paul Taylor, Lesley Wroughton, Catherine Bremer; Writing by Noah Barkin; Editing by Ruth Pitchford)