UPDATE 1-G20 ministers to discuss Europe at Korea G20 meeting

By Louise Egan

OTTAWA, May 31 (BestGrowthStock) – There will be considerable
discussion about the European economy at the G20 meeting of
finance officials and central bankers in Busan, South Korea,
this weekend, a senior Canadian finance official said on
Monday.

The official told a briefing that the euro zone debt
problems added new urgency to the need for countries to design
credible plans to withdraw extraordinary stimulus from their
economies next year.

Canadian Finance Minister Jim Flaherty also plans to stress
at the meeting that many countries are reaching their limits in
terms of fiscal stimulus.

The Busan meeting will let finance officials prepare the
groundwork for a leaders’ summit in Toronto in June. It will
focus on financial reform, including a proposed global bank
levy, and start spelling out policies needed to rebalance the
global economy as it starts to grow again, the official said.

For example in large surplus countries like China, a more
flexible currency would help boost domestic consumption, the
official said.

Canada has vocally opposed proposals for a global bank levy
to ensure taxpayers don’t bear the cost of future financial
meltdowns.

But the official said Canada has received growing interest
for its proposal for contingent capital, which would require
banks to hold a substantial part of their capital in securities
that could be converted to equity in a near-death experience.

Finance Minister Jim Flaherty will present more details of
that alternative to his counterparts in Busan.

The official also said the G20 finance officials will seek
progress on commitments that countries have made to eliminate
inefficient fossil fuel subsidies.

Stock Market Report
(Reporting by Louise Egan; editing by Janet Guttsman)

UPDATE 1-G20 ministers to discuss Europe at Korea G20 meeting