South Korean President Lee Myung-bak and other leaders of the world's major economies pledged Tuesday to accelerate growth and job creation to underpin the global economic recovery troubled by the eurozone debt crisis.
The leaders of the Group of 20 economies said in a joint statement that they expect eurozone members to take all necessary measures to "safeguard the integrity and stability" of the area and "break the feedback loop between sovereigns and banks."
They voiced support for the eurozone to take steps toward greater financial integration of the 17-member single-currency bloc, such as banking supervision, bank resolution and recapitalization, and deposit insurance.
They also called on eurozone nations to work with a new government in Greece to help the debt-ridden country carry out restructuring and overcome the crisis while staying in the zone, according to the statement issued at the end of the two-day summit.
"We are united in our resolve to promote growth and jobs," the statement said. "Strong sustainable and balanced growth remains the top priority of the G20, as it leads to higher job creation and increases the welfare of people across the world."
In an effort to boost trade, the leaders extended their "standstill" commitment against protectionist policies until the end of 2014 after Lee stressed strongly that free trade is key to the global economic recovery, officials said.
"Now is the time to facilitate international trade so as to create jobs," Lee was quoted as saying during a working lunch with other world leaders Tuesday, according to presidential economic aide Lee Jong-hwa.
"When we gathered in 2008, we decided not to seek protectionist trade. ... Fighting protectionism is very important for all of us, but protectionism appears to be on the rise. Let's demonstrate our commitment to free trade again," Lee said.
South Korea and other pro-trade nations wanted to extend the commitment until the end of 2015, but after Brazil and Argentina opposed the two-year extension, the leaders settled for extending the standstill measure by one year, officials said.
The summit in Mexico's resort city of Los Cabos came as global markets have been on edge as the crisis threatened to engulf Spain, the fourth-largest economy in Europe's single-currency zone, after bringing Ireland, Portugal and Greece to their knees over the past two and a half years,
Sunday's general elections in Greece provided a brief respite as pro-euro parties won the vote and defused fears that the country might exit from the zone, one of the most dreaded scenarios not only for Europe, but also the global economy as well.
But the relief was quickly overshadowed by worries about Spain.
On Monday, the yields of Spanish bonds soared past the 7 percent mark to their highest level since the creation of the single currency in 1999, fueling fears about the possibility of the country seeking a full-blown bailout.
During the opening session Monday, Lee appealed to crisis-hit nations to come up with fundamental solutions to their debt problems and restore growth momentum through deep-reaching restructuring measures, saying South Korea overcame the 1997 Asian financial crisis the same way.
Lee also urged the eurozone to speed up discussions on reforming its system, apparently calling for underpinning its monetary union by a fiscal union and a banking union, while urging other G20 members to strengthen policy coordination to help the eurozone get over the crisis.
On the second day of the summit, Lee called for spurring growth in developing economies, saying it will serve as an important engine to speed up the global economic recovery. Lee also highlighted green growth as a key strategy to seek sustainable and balanced growth of the world economy.
"Green growth is a way that makes the environment and the economy compatible," Lee said during a second session of the summit. "It is an effort to look for a new growth engine, and I believe it contributes to a sustainable and balanced growth of the world economy."
Mexico was the first leg of Lee's four-nation trip to Latin America that will also take him to Brazil for a U.N. sustainable development conference, and Chile and Colombia later this week for bilateral visits. (Yonhap News)
