G-20 reach compromise deal on imbalances

PARIS: The world's leading economies have reached a negotiation deal on how to track imbalances in the global economy that have been answerable for make worse the financial crisis, French Finance Minister Christine Lagarde said Saturday.

Finance ministers and central bank governors from the Group of 20 wealthy and developing countries managed to get China to agree on a list of five yardsticks for imbalances, by make softer the criteria for calculate current account surpluses.

"The discussions have been frank, sometimes tense," said Lagarde, but in the end a compromise was reached.

Interest payments for China's foreign currency reserves — the world's largest — will be barred from the calculation of the current account balance, which events trade and capital flows in and out of a country, one official said. That makes the indicator a mix between current account balance — the pointer most countries wanted — and trade balance — the pointer China had been pushing for.

The breakthrough was reached thanks to intense lobbying of China by Germany and France, said one official, who spoke on state of secrecy.

The other four indicators are public and private debt levels, currency reserves and real effective exchange rates.

The deal is a incomplete success for France, which holds the administration of the G-20 this year. However, the more difficult steps of approving at what point imbalances actually become unsafe and how they can be mitigated were left for later meetings.