'Global economy at risk without unity'
Monday, January 26 12:19 pm

http://uk.news.yahoo.com/4/20090126/tuk-global-economy-at-risk-without-unity-dba1618_1.html

The global economy will be undermined unless countries work together, Gordon Brown has warned.

The Prime Minister said without co-operation there was a danger that "financial protectionism" would arise, with dire consequences for growth.

He added that although there was a "great deal" individual states could do, the only long-term solution was international, with better regulation and co-ordinated government intervention.

The urgency of his comments were underlined when steel-maker Corus announced it was shedding 2,500 jobs in the UK.

Setting the scene for April's G20 talks in London, Mr Brown said: "If what happens to a bank in one country can within minutes have devastating effects for banks on a different continent, then only a truly international response of policy and governance can be effective."

He insisted the UK Government was taking the right action to tackle problems in the domestic financial sector, and banks were not getting "free money" from the taxpayer.

However, he highlighted that businesses and families were still suffering because lending from foreign institutions was drying up.

He said: "We have not yet seen the protectionism in trade with beggar-thy-neighbour policies such as the 1930s and I will work hard to ensure we do not."

"But we also need to work to ensure that we do not experience a new form of financial protectionism, of mercantilism, of retreat into domestic financial markets."