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Leaders of the world's most powerful countries have agreed to pump $1 trillion into the ailing global economy by 2010.
In a news conference to mark the end of the London G20 summit, British Prime Minister Gordon Brown said that the funding formed part of a package that would shorten the recession and save jobs.
U.S President Barack Obama said later the G20 summit had been “very productive” and should mark “a turning point” in the pursuit of economic recovery. He also pledged that the International Monetary Fund would be reformed.
“By any measure, the London summit was historic,” he told a post-summit press conference.
“It was historic because of the size and the scope of the challenge that we face and because of the timeliness and the magnitude of our response.”
Agreements have been made to give the International Monetary Fund, which helps country's with struggling economies, a $750billion (£510billion) rescue package.
This consists of a $500billion boost plus a $250billion IMF "overdraft" in Special Drawing Rights (the currency of the IMF) that can be used by the world's poorest countries. There also will be about $250bn committed to boost international trade.
Other measures included action to “clean up” the banks — with new rules on pay and bonuses — and imposing sanctions on countries that do not sign up to anti-tax haven regulations.
Declaring that India was the new global power, US President Barack Obama said the country is a critical player on the world stage. Obama was speaking after he had his first meeting with PM Manmohan Singh on the sidelines of the G-20 summit.
Brown, speaking on behalf of the G20 leaders, said: “We believe that global problems require global solutions. This is the day that the world came together to fight back against the global recession, not with words but with a plan for global recovery and reform.”
Mr Brown said new rules on pay and bonuses “at a global level” that reflected actual performance not failure would “encourage corporate responsibility in every part of the world”.
German Chancellor Angela Merkel praised the summit agreements saying: "Very, very good, almost historic compromise."
A long line of limousines containing other world leaders streamed through London’s Docklands amidst extremely tight security for the G20 summit. President Obama had warned that agreement at the summit was essential if the world was to avoid the mistakes which led to the Great Depression of the 1930s.
Anti-poverty campaigner Bob Geldof also said today that the price of failure would be "beyond catastrophic". He told reporters at the ExCel Centre: “Normally in summits you get a nice agreement but nobody takes it seriously. We had better take it very seriously indeed.”
Hopes of a deal hit a last-minute stumbling block after French president Nicolas Sarkozy and German chancellor Angela Merkel last night warned they would not sign up unless there was tougher regulation of financial markets.
At a joint news conference yesterday, they said that it was a “red line” issue and that they would speak with “one and the same voice” in the talks today.
Mr Sarkozy in particular has faced accusations of grandstanding for the benefit of a French domestic audience, a claim he angrily brushed aside insisting that his hard-line stance was nothing to do with “ego or temper tantrums”.
Nevertheless the French president was a pointedly late arrival at last night’s working dinner for the leaders at No 10.
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