This summer has confirmed what many of us already feared: a global economic recovery which appeared to be taking hold 12 months ago has now stalled. Three years after the financial crisis erupted, the world faces the triple challenge of growth, debt and bank instability. Each is difficult enough to overcome: together they make a poisonous cocktail.

Last week’s Jackson Hole conference made it painfully clear that these challenges can be tackled only with political will and greater international co-ordination. It also revealed a lack of agreement on fundamental questions between the International Monetary Fund, European Central Bank and US Federal Reserve, while exposing the absurdity of discussing these issues only at an academic conference of central bank governors, rather than a meeting of our political leaders.

We cannot go on like this. The international community must start speaking with one voice – and fast.

The current risks to market confidence and the plummeting prospects for global growth mean we cannot risk waiting until November’s meeting of leaders of the Group of 20 leading economies. It should be brought forward and I hope David Cameron will make this case when he sees Nicolas Sarkozy, the G20 chairman, at Thursday’s meeting on Libya.

The lack of demand is the short-term impediment to a global recovery – as Ben Bernanke, Federal Reserve chairman, made clear at Jackson Hole. So any summit must set a clear agenda for growth – a global plan B – to put the world’s recovery back on track. Ed Balls and I are clear what that means.

Monetary policy is crucial, so the G20 should first bridge divisions between central banks, which erode public confidence in policymakers’ ability to handle events threatening jobs and livelihoods.

Second, we need a more balanced approach to fiscal policy. When growth is already stagnant across much of the developed world, the idea that all countries should make deep cuts – irrespective of their fiscal position – risks locking us into low growth. Collective austerity, advocated by our government, is too simplistic for the complex challenges the world faces.

A summit should allow world leaders to reiterate their commitment to fiscal sustainability. It would give them the chance to anticipate where the next crisis in sovereign debt might strike – and take credible steps to forestall it.

But if all big economies curtail demand, there will be no export-led route out for those countries that need to take urgent action on their deficits. Rather than the old danger of beggar my neighbour, we risk all being beggared together. Instead, an immediate meeting of the G20 should seek to build a consensus around the clearly expressed view of Christine Lagarde, the IMF’s managing director, “ that slamming on the brakes too quickly will hurt the recovery”. Countries such as the UK and the US, which continue to enjoy historically low interest rates, should use that opportunity to take a balanced, medium term approach to reducing their deficits.

The eurozone itself should do more to support growth. Countries with large deficits and high borrowing costs need to take action to reassure investors. Under market pressure, Italy and Spain are already on that path. But their strategy will work only if there is some system of euro-wide debt guarantees.

Third, we need banking systems that people trust, which are not just solvent but also lending the money needed for businesses to grow. Ms Lagarde is right to warn that sovereign debt and stagnant growth pose new risks of instability in the banking system. But I am concerned by reports that concerted industry lobbying and splits within the UK government may delay reforms of Britain’s banks. Neither should be an excuse not to deliver the change we need.

There are of course other pressing issues for the G20 to address, including trade, structural reform and the reform of the credit ratings agencies. But it is now urgent for the G20 to focus on the three principal challenges of growth, debt and banking stability. Unfortunately our prime minister appears to prefer standing on the sidelines, complacently claiming that we are a “safe haven”. There is no safe haven from the problems of the world economy. A leader who suggests otherwise is naive, especially one who is responsible for an open economy and has bet the farm on export-led growth.

As in the financial crisis of 2008, we face global economic threats that can only be addressed by global economic leadership. There is no time to lose.

The writer is leader of the opposition Labour party

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