G8 leaders propose end to bank rescue packages
The world's largest economies are stabilising and the unwinding of rescue measures should now be considered, finance ministers at the G8 conference said yesterday.
By Angela Monaghan and Graham Ruddick
Telegraph, 13 Jun 2009
However, the economic leaders, also gave warning that "significant risks remain" and that support packages for their economies, including muli-billion pound spending stimuli, should only be pulled back once a recovery is certain.
In the communique following the end of the conference in Lecce, Italy, the ministers, including the Chancellor, Alistair Darling, and the US Treasury Secretary, Tim Geithner, said: "There are signs of stabilisation in our economies, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence. But the situation remains uncertain and significant risks remain to economic and financial stability.
"We must remain vigilant to ensure that consumer and investor confidence is fully restored and that growth is underpinned by stable financial markets and strong fundamentals."
Although the ministers have asked the International Monetary Fund to analyse possible exit strategies from the radical programmes designed to support economies, Mr Geithner said there was "very strong consensus" that it is still too early to apply exit strategies.
The views of the financial leaders add to growing optimism that the worst of the economic downturn is over.
In Britain, June has produced the biggest one-month upgrade in economic growth forecasts in a decade amid growing speculation that the British recession may already be over.
The consensus for growth in 2009 rose 0.1 points, and for 2010 it rose 0.4 points producing an average upgrade of 0.25 points – the largest monthly uptick since 1999 according to Michael Saunders, economist at Citigroup.