Merkel, Brown call for global economic charter

Leaders of the Group of Twenty (G20) governments have called for greater global cooperation - not a retreat from globalisation – for solving the current economic crisis.

Speaking at the annual meeting of the World Economic Forum in Davos, Switzerland, German chancellor Angela Merkel said "the central task of politicians now is to restore the ability of markets to function, thereby creating a new trust, on a sounder footing."

She pointed to the need to address global challenges with global efforts and called for a new set of rules and an overhaul of the global financial architecture. She also called for the adoption of a post-crisis charter for a global economic order.

Merkel said the G20 - which groups the industrialised powers and emerging giants Brazil, China, India and Russia - could eventually agree on a global economic charter to enforce new standards when the world comes out of the financial crisis.

She said a UN economic council based on the UN Security Council may have to be created to police the global economy, while British prime minister Gordon Brown said his "shared revolution" would strengthen current international institutions.

The priorities of the G20 meeting would be agreeing "an early warning system of risk on any continent in the world economy" and replacing "the patchwork of current regulation," Brown said.

He would push for "international standards of transparency and disclosure" for financial institutions. "And we need to reform and strengthen international institutions giving them power and resources to invest at global level."

Both proposals went counter to US ideas rejecting any global enforcer. At a Group of 20 summit in November, Washington fought for national regulators to take precedence.

In an interview published today, Brown added that he had "utter confidence" that Britain could solve the worldwide economic crisis. Britain was "in the eye of a global financial storm" but was the only country leading the way out of the downturn, he told British newspaper The Daily Telegraph.

"The central issue is: do we have the self-belief and confidence in ourselves as a country to solve the problems that every other country faces?" he said

President Felipe Calderon of Mexico, South African prime minister Kgalema Motlanthe and Han Seung-Soo, prime minister of the Republic of Korea also called for coordinated action on a number of fronts, including fiscal and monetary policy measures to stabilise the global financial system.

Brown and Merkel set out the case for greater international control at the World Economic Forum in Davos, both looking forward to a new G20 summit on the crisis to be held in London in April.

On the climate action front, leaders said consensus was needed on the 'Road to Copenhagen'. With the international community under pressure to deliver a successor to the Kyoto Protocol, panellists emphasised the importance of delivering an agreement that has the full support of policy-makers and industry leaders from both industrialised and developing economies.

''What is most important is that this year is not wasted. We are running out of time,'' said Al Gore, former vice-president of the US.