South Korea - Finance ministers and central bankers from the world's leading economies agreed Saturday on the need to cooperate in fending off financial market turmoil and keeping the world economic recovery on track. In a statement that will serve as an outline for talks later this month by national leaders, including President Barack Obama, the Group of 20 endorsed rescue policies for Europe and the need to rebalance growth by supporting more domestic demand and greater trade by developing countries. The agreement included no major new initiatives, but it bridged differences over details of far-reaching financial reforms with calls to step up regulatory changes and cut back on massive budget deficits. "The recent volatility in financial markets reminds us that significant challenges remain and underscores the importance of international cooperation," the statement said. Countries must "put in place credible, growth-friendly measures, to deliver fiscal sustainability," it said, noting that the policies would have to fit each country's unique situation. Europe's sovereign debt crisis has sparked worries that the global economy could succumb to a second downturn following the meltdown sparked by the collapse of US investment bank Lehman Brothers in 2008. The group welcomed measures taken by the European Union, the European Central Bank and the IMF, including a $1 trillion bailout, to help countries cope with the fallout from unsustainably high debt levels. "All of us have a strong interest in seeing those programs succeed in restoring confidence," US Treasury Secretary Timothy Geithner told reporters after the meetings ended. He emphasized the US commitment to rebalancing growth. "The United States is moving aggressively to fix things we got wrong and to strengthen our economic fundamentals. And we will give our full support to the G-20 agenda of growth and reform," he said. Officials said that Hungary's warning Thursday that it could face a Greek-style financial meltdown added urgency to the talks. The euro fell below $1.20 for the first time in more than four years in reaction to the news. But European officials insisted that worries about Hungary and the euro were overblown. "Hungary has made serious progress in consolidating its public finances over the last couple of years," Olli Rehn, Europe's commissioner for economic and monetary affairs, told reporters. Any talk of a risk of default "is widely exaggerated," he said.
