Gordon Brown would want us to believe that there has been a cash injection of $1 trillion into the IMF to help the world’s struggling economies. The headlines this morning are full of quotes from the leaders hailing this as a great step forward in the new world economic order. Brown is this morning basking in the glory of putting together a ‘global’ deal and he also has his support from Obama who hailed the outcome as ‘historic.’
But will this ‘deal’ do what it says on the tin and reverse the recession? I doubt it. As I mentioned yesterday, the G20 meeting has come 6 months too late. Most leaders of G20 nations have put measures in place to deal with their economies and will wait to see whether they work before doing anything else regardless of what they have signed up to.
And once the economists and other analysts have had time to look at the astronomical figures talked about at the G20, we will have a presented to us a completely new picture, for example, at least $250bn of the trade finance will come from existing programs of export guarantees in rich countries and isn’t new money. No doubt there’s much of this in this $1 trillion package. Fraser Nelson has written a typically excellent piece over at coffee house which is a must read.