[JURIST] European members of the Group of 20 (G20) [official website] financial policy body said Sunday that tighter regulation [EU press release] of the financial industry and liberal trade policies are necessary to help the global economy recover from its recent downturn. The leaders met in Brussels to discuss the "European position" on how to address the crisis, in anticipation of the full G20 meeting on April 4. In a release [text] on the talks, German Chancellor Angela Merkel [official website] announced that the group specifically wants to double the budget of the International Monetary Fund (IMF) [official website], increase regulation of hedge fund operators, impose sanctions against countries which host tax shelters, and discourage protectionist trade policies. The G20's last meeting [summit release] was in November, during which members called for global solutions to the crises to be presented at the April meeting.
It remains unclear how other world economic powers, like the US, will respond to the European initiatives, given the country's prior resistance to increased regulation of the international financial industry. Last week, the US took a major step in its effort to stimulate its economy through the passage of the American Recovery and Reinvestment Act (ARRA) [JURIST report]. The act originally raised global concerns [JURIST report] of protectionism with its controversial "Buy American" clause requiring that all goods used in funded projects to be made in the US. The bill has since been amended [JURIST report] to clarify that the law will be applied consistently with US obligations under international trade agreements.