Sweden, currently holder of the rotating presidency of the European Union, has asked for a special informal meeting of the European Council of the bloc’s heads of state and government on September 17 to co-ordinate the EU’s position ahead of the G20 summit in Pittsburgh.

The G20 countries, or the Group of 20 that the name refers to, consist of the world’s 20 largest economies. The G20 was formally established in 1999 as a way to gather the world’s largest industrialised nations and developing nations to discuss global economic issues. The G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States, along with the EU.

The G20 summit in Pittsburgh is on September 24 and 25, and will address the overall economic situation, compensation and bonuses in the financial sector and how to strengthen supervision and regulation of the financial markets.

It will also address the issue of resources and governance of the International Monetary Fund, job creation, energy efficiency and trade/Doha-negotiations and increased support to Low Income Countries.

At the initiative of US president Barack Obama, the G20 summit will also discuss climate financing.

At a preparatory meeting in London on September 5, finance officials from the G20 vowed to maintain stimulus measures to boost the global economy, warning that the fledgling  recovery that provided the backdrop to their meeting is by no means assured, voanews.com said.

Even though there are some early signs that the recession may be starting to fade in places like Germany, France and Japan, the finance chiefs vowed to keep spending.

US treasury Secretary Timothy Geithner said: "We need to provide sustained support for growth and financial repair until we have in place a strong foundation for recovery.
Economists point out that withdrawing too early from the trillions of dollars worth of stimulus packages that have been pumped into the world economy over the past few months could result in another downturn, creating a so-called double-dip recession, voanews said.

Geithner said that one of the last factors to improve in any downturn is unemployment. He said that governments must continue to work in this area.

"The financial system is showing signs of repair, growth is now under way," Geithner said. "However, we still face significant challenges ahead. Unemployment is unacceptably high. Conditions for a sustained recovery, led by private demand, are not yet established."

Geithner said that while action by central banks and governments has pulled the global economy back from the edge, it’s important that reform continues.
"As we look towards the summit in Pittsburgh, we need to bring the same sense of common purpose and urgency that we demonstrated at the peak of the crisis to the challenge of restoring growth and to reforming the financial system," he said. "We made a lot of progress but we have got a way to go and we cannot let momentum for reform fade as the crisis recedes."
The finance officials also pledged in general terms to put restrictions on excess bankers’ bonuses, but did not agree on specific limits on the amounts individual bankers get paid. Many blame that bonus culture for fuelling the current crisis. Britain, the US and Canada opposed the idea, but the Financial Stability Board is to examine the issue.

They also discussed a US proposal to require international banks to maintain deeper reserves so they would be able to cover any potential loan losses that might arise in the future.

UK chancellor Alistair Darling said all bankers were obliged "to make sure that their pay practices are responsible", the BBC reported.

"Above all, we are determined to take action to stop banks or other financial institutions getting themselves into a situation where their pay-and-reward practices actually encourage people to take risks which bring their institutions into a situation where they could be brought down with catastrophic results," Darling said.

Bulgaria’s daily Dnevnik reported that the IMF has lifted its 2010 economic outlook, seeing global gross domestic product up by almost three per cent, upgrading its 2.5 per cent forecast from July.

Despite the expected rebound, IMF chief Dominique Strauss-Kahn said fiscal stimulus measures should stay in place and governments should draw up plans to overcome the economic slowdown. But on the sidelines of the G20 meeting on September 5, Kahn said, as quoted by the Wall Street Journal, that joblessness would continue to mount worldwide, climbing to its highest level next year.

He advised governments not to rush with phasing out measures to tame the crisis, saying the world is right in the eye of the economic storm and unemployment will remain one of the main issues.