LONDON - THE global economic crisis is not over and unemployment will keep rising in the months to come, the leaders of Britain, France and Germany warned on Thursday before a meeting of G20 policymakers in London this weekend.
In a letter to European Union colleagues, the leaders of the bloc's three biggest economies also promised binding measures to curb bank bonuses in a bid to appease public anger over financial sector excess that many blame for the world recession.
With interest rates at record lows and trillions of dollars thrown into their economies, the leaders said there was right now no alternative to keeping the extraordinary stimulus in place but plans should be made for its coordinated withdrawal.
'We must be careful to avoid laying the foundations of new global imbalances,' wrote British Prime Minister Gordon Brown, President Nicolas Sarkozy and German Chancellor Angela Merkel. 'Therefore we should work on exit strategies to be implemented in a coordinated manner as soon as the crisis has ended.'
Speaking in Frankfurt after euro zone interest rates were left unchanged at just 1 per cent for the fourth month, European Central Bank President Jean-Claude Trichet agreed that now was not the time to tighten policy as recovery was not certain.
'It is more of a bumpy road ahead. Uncertainty is high. Prudence and caution are still of the essence,' he said.
His assessment will likely be shared by finance ministers and central bankers from the Group of 20 developed and emerging nations when they meet in London on Sept 4-5 to lay the groundwork for a leaders' summit in Pittsburgh.
'I believe we can be confident about our prospects for 2010. But there are still uncertainties and risks that we have to confront,' British finance minister Alistair Darling, the meeting's host said in a speech late on Thursday. -- REUTERS
