WASHINGTON – President George W. Bush underscored how dire the economic crisis has become when he told world leaders that he had agreed to a $700 billion rescue plan for financial institutions only after he'd learned the U.S. was at risk of sinking into a "depression greater than the Great Depression."
Leaders from 21 nations and four international organizations gathered in Washington for an emergency summit aimed at combating an economic meltdown that started in U.S. credit markets and rapidly spread around the globe.
Summit participants vowed Saturday to cooperate more closely, keep a sharper eye out for red-flag problems and give bigger roles to fast-rising nations. But they avoided many of the hardest details, leaving them to be worked out before their next summit, after Bush is gone and President-elect Barack Obama is in the White House.
At the conclusion of talks that took place over two days, they released a joint communique that was modest in scope but high in hopes.
Perhaps as important as the modest concrete steps they took, the leaders of the planet's richest nations — and some of the fastest-developing — made clear their recognition of the world's increasingly interconnected financial architecture and the responsibilities that go along with it.
"There shall be no blind spots," German Chancellor Angela Merkel declared. "There is here a great common will to ensure that such a crisis is not repeated."
Covering eight pages and 47 action items, the document's overarching focus is to establish a series of new safeguards for the fragile and opaque global financial system. Nearly all the efforts are aimed in some way at better flagging risky investment patterns and regulatory weak spots before they bring down companies and then ripple through entire economies, as has happened in recent months.
The leaders also discussed the shorter-term problem of how to bring their nations' economies back from the brink. Some had pushed ahead of time for a pledge of coordinated new government stimulus spending by each nation.
But with Bush cool to such action in the U.S., the communique only endorsed taking such action "as appropriate."
The talks were remarkable for drawing together a vast number and array of nations and bringing them to agreement on a set of actions, however limited, in less than a month's time. Leaders from major powers including Britain, Germany, France and Japan were there, alongside rulers from developing countries such as China, India, Brazil and South Korea as well as from the oil-rich Gulf state of Saudi Arabia. The summit was announced on Oct. 22, and the urgency of the downward-spiraling global economic situation led to much faster action than is typical.
A handful of the hundreds of protesters that flocked to the U.S. capital city succinctly summed up skepticism about their benefit to the families around the world who are increasingly worried about mortgages, retirement savings and jobs. "Money for people's needs, not bankers' greed," said their bright yellow signs.