Prime Minister Lawrence Gonzi has said he is generally positive about last week's G20 agreement in London which pledged $1 trillion to try and kick-start the global economy but that "nobody is 100 per cent sure that this will work". He said it was now important to monitor the effect of this agreement on the global economy and that if it doesn't work "then we will probably have to sit down again and try to come up with some other measures".
Speaking to The Times Business Dr Gonzi said he believes the G20 agreement was actually much better than he expected.
"The G20 outcome is concrete and focused. $1 trillion are being made available to try and stimulate economic growth at a rate which is faster than the IMF had predicted, and that is what the world needs at this stage. The G20 agreement is trying to address those very issues that seem to have created all these problems in the first place.
"This is why I appreciate very much what was done with respect to credit rating agencies and measures to control financial institutions, hedge funds and all those areas which seem to have not been adequately regulated in the past," he said.
Dr Gonzi, however, offers a word of caution about the G20 agreement: "Perhaps there is one thing that one has to be careful about now, and this is something which President Obama said at the EU-US summit which I attended in Prague. At this stage nobody can really be sure that all this will work. Notwithstanding everything that is being done, the enormous funds for example - never in modern history has anything of this sort ever been attempted - nobody is 100 per cent sure that this will work," he said.
The Prime Minister said the important thing now is to monitor very closely what is going to happen in the world's economies.
"We have to see whether the economies will respond to all of this, whether consumer confidence and demand will start to grow again. If that works we will be fine, but if it doesn't work then we will probably have to sit down again and try to come up with some other measures."
Regarding the fact that no joint stimulus package was agreed to at the G20, Dr Gonzi said: "My position has always been very clear. The world is made up of different economies with a lot of variables or rather different situations in different countries.
"There are factors which distinguish one country from the other. I strongly believe that one- size fits all solutions is no solution at all. On the contrary it will probably push funds into areas which do not really require them, and reduce funds into areas that should be going into," he said.
"I believe we should leave this flexibility in the hands of every country and their own particular situation and then the sum of all of that comes together. It's like a mosaic where every bit put together - although different - completes the whole picture. If all the individual stimulus packages are actually implemented by each one of these countries then there is a good chance that the economy will start to respond. If all of this creates demand on a global scale, then the global economy will certainly start to recuperate," he said.
Speaking to The Times Business Dr Gonzi said he believes the G20 agreement was actually much better than he expected.
"The G20 outcome is concrete and focused. $1 trillion are being made available to try and stimulate economic growth at a rate which is faster than the IMF had predicted, and that is what the world needs at this stage. The G20 agreement is trying to address those very issues that seem to have created all these problems in the first place.
"This is why I appreciate very much what was done with respect to credit rating agencies and measures to control financial institutions, hedge funds and all those areas which seem to have not been adequately regulated in the past," he said.
Dr Gonzi, however, offers a word of caution about the G20 agreement: "Perhaps there is one thing that one has to be careful about now, and this is something which President Obama said at the EU-US summit which I attended in Prague. At this stage nobody can really be sure that all this will work. Notwithstanding everything that is being done, the enormous funds for example - never in modern history has anything of this sort ever been attempted - nobody is 100 per cent sure that this will work," he said.
The Prime Minister said the important thing now is to monitor very closely what is going to happen in the world's economies.
"We have to see whether the economies will respond to all of this, whether consumer confidence and demand will start to grow again. If that works we will be fine, but if it doesn't work then we will probably have to sit down again and try to come up with some other measures."
Regarding the fact that no joint stimulus package was agreed to at the G20, Dr Gonzi said: "My position has always been very clear. The world is made up of different economies with a lot of variables or rather different situations in different countries.
"There are factors which distinguish one country from the other. I strongly believe that one- size fits all solutions is no solution at all. On the contrary it will probably push funds into areas which do not really require them, and reduce funds into areas that should be going into," he said.
"I believe we should leave this flexibility in the hands of every country and their own particular situation and then the sum of all of that comes together. It's like a mosaic where every bit put together - although different - completes the whole picture. If all the individual stimulus packages are actually implemented by each one of these countries then there is a good chance that the economy will start to respond. If all of this creates demand on a global scale, then the global economy will certainly start to recuperate," he said.