x Abu Dhabi, UAEWednesday 26 July 2017

British PM to call for new global financial system

Gordon Brown wants a Bretton Woods-style summit to pave the way for a new world financial order.

Britain's prime minister Gordon Brown wants to redraw the world's financial rules.
Britain's prime minister Gordon Brown wants to redraw the world's financial rules.

LONDON // Gordon Brown, the prime minister of Britain, will push for a new global financial system that updates the 1944 Bretton Woods agreement, in a speech due to be delivered today. Mr Brown's speech follows weeks of attempts to coordinate the international response to the global financial crisis, and to source funds to support a wide-ranging economic rescue effort. Britain had called on Gulf countries to provide liquidity to the International Monetary Fund, at a time when many of the world's industrialised countries are pumping cash into world markets. China was the latest to do so when it said it would make available a US$586 billion (Dh2.1 trillion) stimulus package to support domestic economic activity.

Mr Brown will press the case for reforms at a meeting of leaders of the G20 group of major world economies to be held in Washington on Saturday to discuss the deepening global crisis. "The British government ... will begin to build a new Bretton Woods with a new IMF that offers, by its surveillance of every economy, an early warning system and a crisis prevention mechanism for the whole world," Mr Brown was due to say in his speech at the annual Lord Mayor's banquet in London.

The conference in Bretton Woods, New Hampshire, established the international monetary protocols governing trade, banking and other financial relations among nations. Mr Brown's office acknowledged today that the Washington summit is likely to be just the first in a series of international meetings to debate and decide on reforms of the financial system. The British leader also planned to say the US and Europe must provide the leadership for the creation of new international financial institutions. "The trans-Atlantic relationship has been the engine of effective multilateralism for the past 50 years. I believe the whole of Europe can work closely with America to meet the great challenges which will test our resolution and illuminate our convictions," he was due to say, according to excerpts of his speech released in advance. European leaders agreed at a meeting in Brussels on Friday to press for reforms of the IMF and to tighten regulations of the financial markets. Mr Brown has already discussed IMF reforms with Nicolas Sarkozy, the president of France, and the German Chancellor Angela Merkel. In a television interview today, Mr Brown suggested that countries could use tax cuts or increased spending to pull themselves out of the downturn. "What I am determined to do is to get all countries around the world trying to get their economies moving again and one way you can do that is by putting more money into the economy by tax cuts or by public spending rises," Mr Brown told Britain's GMTV program this morning. Mr Brown will also say the world faces five major challenges - to promote democracy, fight terrorism, strengthen the global economy, tackle climate change and resolve conflict. *AP