Wednesday, 1 April 2009

G20 Summit : George Soros says its success hovers on a 'knife edge'

George Soros said the success of the G20 meeting was "hovering on a knife edge between success and failure" and would depend on a pledge to increase the global money supply to help poor countries.

In a speech at the London School of Economics, the billionaire investor said the G20 should create about $250bn of the International Monetary Fund's Special Drawing Rates – international reserve assets which can be exchanged for major currencies – to make an impact. IMF member countries are allocated SDRs in proportion to their IMF quotas.

"Rich countries that are able to print their own money and provide guarantees should re-allocate their allocations to the most vulnerable countries. It boils down to the international creation of money," Mr Soros said.

"It would be a tremendous accomplishment for the G20, a practical achievement to move the world forward. The principle of doing it and endorsement from the G20 leaders would be the most one could expect [from the summit meeting]."

Leaders of the G20 meet in London tomorrow with the global economy facing what the OECD described yesterday as the “deepest and most synchronised recession in our lifetimes”

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