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Geithner rejects tax for bailouts
Group of 20: They’ll keep stimulus in place
Published: 11/08/09  12:05 am
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LONDON – U.S. Treasury Secretary Timothy Geithner on Saturday turned a cold shoulder to British Prime Minister Gordon Brown’s call for a global tax on financial transactions by banks.

Also at the G20 meeting, finance ministers and central bankers from the world’s 20 most powerful economies agreed to keep massive stimulus measures in place until the global economic recovery strengthens.

Geithner told Sky News that he was not prepared to support Brown’s call for global leaders to examine an international financial tax, but said Washington shared a commitment to ensure taxpayers aren’t forced to pay for future financial-sector bailouts.

The proposal, delivered by Brown in a speech to Group of 20 finance ministers and central bankers gathered in St. Andrews in Scotland, caught officials by surprise. The British government had previously showed little interest in such measures.

As expected, the G20 officials agreed to maintain economic stimulus measures.

In a joint statement, the officials said economic and financial-market conditions had improved since the G20 agreed to coordinated stimulus measures in the spring, but warned that the recovery remained “uneven” and that high unemployment is a “major concern.”

“To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured,” the statement said.

Geithner said October U.S. unemployment data released Friday “reinforced that this is still a very tough economic environment.” The unemployment rate rose above 10 percent for the first time in 26 years.

At the same time, the G20 finance ministers said they remained committed to coordinating the withdrawal of stimulus measures once a solid recovery is in place.

“We agreed to cooperate and coordinate, taking into account any spillovers caused by our strategies, and consulting and sharing information where possible. To ensure credibility, our plans will be based on prudent assumptions and communicated promptly and transparently,” the statement said.

 

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