Tackling the Slowdown
February 5, 2009
Merkel is expected to build on long-running calls to inject transparency in global markets to avert a repeat of the wrenching economic crisis currently engulfing the world as she meets the chiefs of the world's top financial institutions at a meeting in Berlin.
The chancellor will host Pascal Lamy, director general of the World Trade Organization, World Bank president Robert Zoellick and International Monetary Fund managing director Dominique Strauss-Kahn. Also expected to attend are Angel Gurria, secretary general of the International Labour Organization and Juan Somavia, director general of the Organization for Economic Cooperation and Development.
Merkel's discussions in Berlin form part of the buildup to a summit of Group of 20 leading industrialized nations and emerging economies set to take place in London on April 2.
Hosted by British Prime Minister Gordon Brown, the G20 summit is expected to review progress towards forging a new global financial architecture aimed at better regulation, greater transparency and improved cooperation among authorities.
Long-running calls for more regulation
The talks in Berlin come as the European Central Bank and the Bank of England were meeting to consider interest-rate changes amid slumping economic growth and dwindling inflation.
Merkel called for greater openness by hedge funds and more market regulation as early as 2007, the year Germany headed the Group of Eight industrialized nations. At the time, she was blocked by the US and Britain.
At the Davos World Economic Forum summit last week, the German chancellor pled for the creation of an international economic body, similar to the United Nations Security Council, to help prevent a repeat of the financial crisis pummeling the global economy.
Economic principles need to be enshrined in "a new charter for a global economic order," Merkel told the business and political leaders gathered at the annual meeting in Davos. "This may even lead to a UN Economic Council, just as the Security Council was created after the Second World War," she said.
Merkel's government has passed two economic stimulus packages, the second worth 50 billion euros ($64 billion), to jump-start Europe's largest economy, which is in the grip of a recession.
The German government is also debating a plan to help stricken banks which could see the nationalization of Hypo Real Estate, a property lender that has been battered by the crisis.