Implementation of Exit Strategies Highly Debated on the Upcoming G20

Anchor: Earlier this month prior to the meeting of finance minister of the G20 group in London, Britain, France and Germany called on the G20 to discuss exit strategies implemented to tackle economic crisis at a forthcoming Pittsburgh summit. Exit strategy will be a key issue, which is expected to be hugely debated at the G20 summit in Pittsburgh. Though the common consensus is that it's time to think about exit strategies, many economists in the United States say it's too early to act. Our Washington correspondent shanshan tells us more.

Ann: Prior to the finance ministers' meeting of the G20 group earlier this month in London, British Prime Minister Gordon Brown, German Chancellor Angela Merkel and French President Nicolas Sarkozy issued a joint letter to European leaders, calling for major economies to avoid creating new global imbalances as the recession receded.

Damon Silvers, member of the Congressional Oversight Panel for the Troubled Asset Relief Program of the United States, says the stimulus package has done a good job in reversing the economy from plunging into recession, and more is needed.

He says though the economy is going upward earlier than expected, rolling back on the stimulus package now would endanger the economic recovery.

"It would be extraordinarily dangerous to roll back the general direction of the monetary policy that Fed Chairman Ben Bernanke has laid out. Pull back at this point would really, in addition to the problems we already have in our banking sector, a pull back on monetary policy right now would really be stepping right into the lost decade. "

IMF First Deputy Managing Director John Lipsky says, while it's too early to withdraw stimulus measures, it's time to start planning.

"This is not the time to withdraw. But now it's the time to think about it, to start communicate and make clear how it will take place and when the time is ready. There needs to be a medium-term view, not just a quick exit strategy."

Just like British, German and French leaders said in the joint letter, at the end of the day, "We must work on exit strategies as soon as the crisis has ended". But when exactly? Member of the Congressional Oversight Panel Damon Silvers says it's hard to give a clear answer.

The calls for taking exit strategies highlight how the policy debate has switched from crisis response to presaging a return to normal conditions. IMF first deputy managing director John Lipsky says we have to be alert and watch.

"Our guess is that the global economy will be back to a more acceptable path by the end of next year. We are positive and optimistic, but nothing should be taken for granted now. We should be alert and continue with the policies that are necessary to underpin the recovery."

Lipsky says countries should take these kinds of policies in a coordinated way rather than an uncoordinated way that could create strains and costs for other countries.

SS, CRI news, Washington.