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Hoping to rein in the global financial crisis, leaders are convening to hammer out plans to help their ailing markets and economies. Experts assess the challenges they will face in trying to reach meaningful agreements.
In addition to the ongoing housing crisis, every day brings new signs of a weakening U.S. economy, from dramatic new drops in retail sales to the daily volatility on the stock market, including today, to new announcements of layoffs in a range of industries, including the technology sector, with today's word that Sun Microsystems will lay off up to 6,000 workers.
And the pain continues to spread around the globe. Just yesterday, Germany, Europe's largest economy, announced its second straight drop in gross domestic product, signaling it had fallen into recession.
And China, long a red-hot economy, reported a dramatic decline in its industrial output in October.
To one degree or another, economic problems are being felt everywhere. And with that as a backdrop, leaders from the so-called G-20, representing most of the world's economic output, are gathering in Washington this weekend for a meeting hosted by President Bush.
Some dramatic actions have already been announced. This week, China said it's preparing a $586 billion stimulus package to keep the country's economy moving ahead. China is expected to play a lead role this weekend.
QIN GANG, Chinese Foreign Ministry Spokesman (through translator):
China believes this coming G-20 summit is a very important occasion for the international community to exchange views on the current financial situation and the future development of the world economy.
Other struggling emerging nations, including three from Latin America — Mexico, Argentina and Brazil — will also take part in the meeting.
LUIZ INACIO LULA DA SILVA, President of Brazil (through translator): We have to inject liquidity into the financial system in order to generate jobs and increase purchasing and a healthy and productive economy.
The gathering was originally proposed by French President Nicolas Sarkozy last month.
NICOLAS SARKOZY, President of France (through translator): This is a worldwide crisis, and therefore we must find a worldwide solution. But this answer will be overall more effective insofar that we find it together, we speak with one and the same voice, and rebuild together the capitalism of the future.
The question now is, what kind of coordinated steps are available to the international community?
Yesterday in New York, President Bush warned against any framework that proposes too much new regulation.
GEORGE W. BUSH, President of the United States: We must recognize that government intervention is not a cure-all. For example, some blame the crisis on insufficient regulation of the American mortgage market. But many European countries had much more extensive regulations and still experienced problems almost identical to our own.
History has shown that the greater threat to economic prosperity is not too little government involvement in the market; it is too much government involvement in the market.
Today, the Secret Service was closing off streets and preparing for the attendance of many foreign leaders at the National Building Museum in Washington, as the summit gets underway this evening.
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