Economists argue that without clear leadership we may be facing another economic meltdown.
|Sarkozy, whose country heads the G20 this year, has told ministers to put national concerns aside [EPA]|
Members of the G20 are striving to reach a deal on a set of indicators to measure the economic health of member states, in a bid to avoid another global financial crisis.
The G20 has been seeking to avoid another major financial crisis by increasing economic co-operation between member states, but in order to do so it is essential the countries agree on a set of economic metrics.
Finance ministers and central bankers from the 20 developed and developing countries are holding a second day of talks in Paris on Saturday to try to finalise the details of any agreement.
In welcoming remarks on Friday, Nicolas Sarkozy, the French president, warned participants that they would have to put national interests aside for the greater good of the group.
“The temptation to give priority to national interests is great. But let me tell you clearly – that would be the death of the G20,” said Sarkozy.
A diplomatic source told the AFP news agency that no agreement emerged during a working dinner for finance ministers on Friday.
The source said that China remained reluctant to agree to certain indicators that were under consideration, and there was no united front among emerging economies on the issue.
However, speaking on Saturday, Wolfgang Schaeuble, the German finance minister, said there was a “good chance” of breaking the current deadlock on the indicators.
He also said that Germany would back French proposals to work on increasing transparency in commodity markets and for implementing a controversial financial transaction tax.
France says that it wants an agreement as soon as possible so that the International Monetary Fund can make policy recommendations in the second half of the year.
“We need a thermometer that works so we can examine the imbalances in all their aspects to make as useful a diagnosis as possible,” said one negotiator.
A series of four indicators are under discussion. Two measure imbalances within countries: the public deficit and debt, plus the level of private savings.
The other two measure external imbalances: the current account balance or trade balance, or foreign currency reserves or real exchange rates.
Sarkozy, whose country holds the G20 presidency this year, has vowed to reform the world monetary system and commodities market.
He said that he aims to defend poorer countries from trade and currency turbulence.
Some member states, including France, have also also discussed the option of curbing the dollar’s supremacy as the world reference currency.
The US delegation, however, has said that it wants to focus on the effect of volatility in capital flows between countries.