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UPDATE 1-Some in G20 urge relaxation of crisis pact-Russia

Published 01/28/2009, 12:21 PM
Updated 01/28/2009, 12:24 PM

(Adds background, details)

MOSCOW, Jan 28 (Reuters) - Some G20 countries are seeking a relaxation of commitments they made at a summit last November in response to the global financial crisis, Russia's G8 deputy sherpa said on Wednesday.

G20 leaders pledged at a crisis summit on Nov. 15 to do all they could to limit the broader economic damage from the worst financial crisis since the 1930s and to resist any temptation to resort to protectionism.

The commitments, in a joint communique, included reform of financial regulation and supervision, pledges to keep the IMF sufficiently funded to help troubled countries and a pledge to refrain from raising any new barriers to trade and investment for a year as a sign of determination to reject protectionism.

Some of the issues are posing problems as the economic slowdown deepens and politicians focus on defending their own economies. Russia introduced levies on imports of used foreign cars this year, while the European Union has decided to offer subsidies to dairy products exported by its members. "There is discussion over how feasible it is for all the countries to fulfil the Washington obligations, and whether it makes sense to refer to the worsening of the situation and to say 'sorry guys, in the near future we are simply not able to (do so)'," Bokarev told a press briefing.

"There are discussions but it is not possible to say as yet how they will finish," he added, declining to comment on Russia's own position on the matter.

In a sign that the economic slowdown could also lead to countries tightening their purse strings, Bokarev said Russia would stick by current G8 commitments on issues such as health care and energy in developing countries, but any new schemes would now be decided on a case-by-case basis.

"The crisis will affect the ability and the willingness of our country and other countries to realise programmes and initiatives," said Bokarev, who is deputy head of the finance ministry's debt and foreign relations department.

He also said Russia wanted the G20 to discuss the need for world diversification from one reserve currency, and to propose that major economies adopt principles of best practice on issues such as maximum budget deficits and debt levels.

G20's finance ministers and central bankers are due to meet in March in London, followed by a gathering of the countries' leaders in April. (Reporting by Toni Vorobyova; Editing by Victoria Main)

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