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G20 Upbeat On Economic Recovery

A view of the G20 meeting of finance ministers and central-bank governors during the spring IMF-World Bank meeting in Washington,
The global economy is recovering faster than expected from the worst recession since World War II.

That's the conclusion from the Group of 20 (G20) rich and emerging countries, whose finance ministers and central bankers met on April 23 in Washington, D.C.

In a six-page communique issued after the meeting, the G20 credited its members' own stimulus packages, which saw massive amounts of money pumped into national economies.

Canadian Finance Minister Jim Flaherty, speaking at a news conference following the talks, also praised countries for their continued contributions to global financial institutions.

"Financial-sector reforms are on track. Nations continue to contribute additional resources to vital international financial institutions, such as the IMF and the World Bank," Flaherty said.

"As today's communique indicates, the global recovery is progressing better than previously anticipated, largely due to the unprecedented efforts of G20 members."

Despite this upbeat assessment, Flaherty said the International Monetary Fund (IMF) had cautioned against being "too optimistic" about the global recovery.

Greece Bailout

While Greece's deepening financial crisis was not formally on the G20's agenda, much of the meeting was devoted to the issue, both during official talks and on the sidelines.

The meeting came as Greece called for an EU/IMF bailout of its debt-ridden economy that is expected to be worth up to 45 billion euros ($60.5 billion).

If granted to Greece, it would be the biggest-ever bailout of a country.

In Washington, G20 finance ministers stopped short of formally backing the aid package but pledged not to let one country's debt troubles threaten other countries.

"We must continue to work towards smarter and more effective regulations that will reduce the risk of contagion from one area across the entire global financial system," Flaherty said.

"And we must not waiver from introducing effective resolution rules for troubled financial institutions, in line with the principle that taxpayers should not bear the cost of a financial crisis."

Financial Reform, Yuan

The meeting, however, failed to bridge sharp differences among G20 countries over proposed new taxes on banks to prevent taxpayers from footing the bill for potential future bailouts.

The communique said that countries would work together on ways to make sure banks make a "fair and substantial contribution" to any emergency financial aid.

The G20 also avoided the thorny issue of whether China should let its currency's value rise more rapidly in order to curb its export-driven growth.

The United States has advocated a stronger yuan, saying this could help reduce the huge U.S. trade deficit.

with agency reports
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