Britain urges G20 to maintain fiscal stimulus

LONDON—British Prime Minister Gordon Brown will warn Saturday against withdrawing the massive stimulus measures launched to tackle the global credit crisis, saying it would be a “serious mistake”.

Brown will urge G20 finance ministers meeting in London not to be too hasty to end the emergency measures that saw huge amounts of money pumped into economies after the credit crunch, as they seek a way out of the crisis.

“To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgement be a serious mistake,” he will say, according to pre-released extracts of his speech.

“On the contrary, with more than half of the five-trillion-dollar fiscal expansion committed to, yet to be spent, I believe the prudent course is for G20 countries to deliver fiscal plans and stimulus packages they have put in place and make sure they are implemented in full both this year and next.”

He adds: “Given the risks we face, this is not the time for economic complacency or over-confidence. The stakes are simply too high to get these judgements wrong.”

Brown’s cautious tone echoed that of Swedish finance minister Anders Borg, who said at the meeting Friday that the world was still “standing in the ashes” of economic catastrophe.

“When you’ve just come out of the ashes, it’s not time to call off the fire department,” he added.

The prime minister will also renew his call for new rules on pay for bankers, emphasizing unity between Britain, France and Germany on the issue — despite signs of a split on the extent to which bonuses should be curbed.

“As (French) President (Nicolas) Sarkozy, (German) Chancellor (Angela) Merkel and I have said this week, all G20 countries should develop together and implement consistent binding rules on bankers’ pay — with sanctions at national level for banks that do not play by them,” he will say.

“We should agree on the sanctions we will take against jurisdictions which fail to meet global standards and commit to implement these actions from March next year… We must act on our pledge to end the era of banking secrecy.” –Agence France-Presse