Britain's Brown expects results from G20 summit

(Agencies)
Updated: 2009-03-26 10:55

NEW YORK -- British Prime Minister Gordon Brown on Wednesday lashed out at corporate greed, saying he would work to set global principles and standards for salaries in the finance sector at next week's G20 summit in London.

Brown promised "detailed results" from the summit as he stopped in New York during a three-continent tour intended to drum up support for a coordinated international response to the global economic crisis.

Brown is hosting the April 2 summit for leaders of the Group of 20, made up of rich and key developing nations that account for more than 80 percent of the world economy.

He said the summit would seek to create international standards for executive compensation. Disclosures of huge paychecks and generous bonuses for executives in the financial sector have drawn increasing public ire as banks and insurance companies have had to be bailed out by governments because they made bad investments or took on too much risk.

"We will even also publish principles about remuneration, so that there are similar standards and for remunerating bankers and the financial system in future in all countries and not just in one, to avoid a race to the bottom which is a consequence of not having any standards at all," Brown said.

Brown said the time had come for a new world economic order.

"A new consensus has to be built, and we know unless we work together and set global standards together we will not be able to have the progress we want," Brown said. "And I say to people in America, it is important to recognize a bad bank in any country can now affect banks in all countries and we should work together to set global standards at the highest level."

Brown made his comments at New York University where he participated alongside former U.S. Secretary of State Madeline Albright and former Federal Reserve Chairman Paul Volcker in a discussion of multilateralism in the 21st Century.

In his speech, Brown maintained a generally positive tone, saying the current crisis was a result of growing globalization and expressed optimism that it would eventually result in a stronger world financial system.

But he warned against a tendency toward increased protectionism in the face of crisis.

"We cannot just stand here, we've either got to act in the way we're suggesting or there will be a retreat into protectionism, because if we cannot show that national and international action can work together, then people will abandon the gospel of free trade and of international cooperation," Brown said. "So, there is huge danger of a retreat into protectionism.

Brown's optimism contrasted sharply with comments Wednesday from the head of the European Union, who characterized President Barack Obama's plan to spend nearly $2 trillion to push the U.S. economy out of recession as "the road to hell."

Czech Prime Minister Mirek Topolanek's comments before the European Parliament highlighted simmering European differences with Washington and some of the obstacles Brown faces in achieving greater international cooperation.

Brown's stimulus plans also appear to be facing resistance at home, with Bank of England Governor Mervyn King warning Tuesday the government must be careful about how much money it pours into stimulus measures in the face of growing deficits.

Earlier in the day, during an interview with The Wall Street Journal, Brown warned of the specter of deflation, where falling prices lead to more layoffs and create a vicious circle of economic shrinkage.

"I think in the short term everybody is concerned about the problems that come from deflation," Brown told the Journal, adding his government was doing "what is necessary to resume growth in the economy."

Following a meeting with U.N. Secretary General Ban Ki-moon, Brown spoke of the impact of the economic crisis on the world's neediest.

"One hundred million people have been pushed into poverty; a half a million more children will die as a result of the failure of our system to provide enough food and help and medical aid for them," Brown said. "Therefore it is urgent that at the G-20 summit that we take action to help the problems of the poorest."

Brown now heads to Brazil and Chile in an effort to drum up support from two key emerging market players.

On Tuesday, Brown spoke to lawmakers at the European Parliament, insisting a cash injection into the global economy will be "twice as effective" if it is adopted by all countries around the world.

By stressing both cash injections into the economy and greater regulation, Brown sought to calm critics both in the United States and the 27-nation EU.

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