European leaders hope to persuade the U.S. and emerging economies to set a timeline for revamping the world financial system at an unprecedented summit of world leaders this week in Washington.
But they face an uncertain response from a lame-duck Bush administration, up-and-coming economic powers such as China, the transition team of President-elect Barack Obama and even among European leaders themselves.
Heads of the 27-member European Union called Friday for beefing up the International Monetary Fund in reshaping the international financial system.
A day later, central bankers and top officials from nations that make up most of the global economy met in Sao Paulo, Brazil, where they pressed the case for emerging economies such as China, Brazil and India to have a bigger role in global finance.
China demonstrated its clout Sunday with a $586 billion package designed to stimulate its economy through public-works and social-welfare spending between now and 2010.
In the United States, Mr. Obama said it was time for Americans to put aside their political differences to focus on averting a deep recession, which he plans to tackle as soon as he moves into the White House in January.
White House officials said the Obama transition team was being briefed on details of the global financial meltdown.
Among a spate of recommendations outlined by the Europeans was a 100-day deadline to produce a blueprint for financial reforms and agree on a follow-up summit.
“This is not about going from an absence of regulation to too much regulation, but proposing new financial game rules,” said French President Nicolas Sarkozy, whose country currently heads the European Union and who has been pushing for EU leadership in the global financial meltdown. “Political Europe speaks with the same voice,” he added.
At the Washington summit Saturday, much attention is likely to focus on two non-European participants, Saudi King Abdullah and Chinese President Hu Jintao, leaders of nations with the biggest surplus cash reserves.
Despite the show of unity, divisions run deep in Europe about how it should deal with the financial crisis - much less what prescriptions to offer others.
“Sarkozy … is coming up with a wealth of proposals about what the EU should do, and most of them are being shot down as soon as they emerge,” said Katinka Barysch, an analyst at the Center for European Reform in London.
Several European countries, including Germany and Britain, are wary of French calls for greater government intervention. So is the Czech Republic, which takes over the EU presidency from France on Jan. 1.
“We don’t need any kind of overembracing, overregulation,” Czech Prime Minister Mirek Topolanek said in Brussels.
Europe has been bitten by the economic and financial meltdown as keenly as any other region.
EU members have scrambled to set up rescue plans for struggling banks, and Europe’s top three central banks cut interest rates Thursday as evidence mounted that the region was moving into a major recession.
The 15-member eurozone will “very likely be in a recession in 2009,” Euro Group President Jean-Claude Juncker said.
Some pundits suggest that Europe’s means to exercise clout are more limited than its ambitions.
A case in point, Ms. Barysch says, are EU calls for a greater role for the International Monetary Fund.
“As much as I would like the Europeans to seize the initiative and really take the lead … I very much doubt they will, because they would have to reduce their own over-representation” in both the IMF and the World Bank, she said.
And with the U.S. government in transition and the response of emerging economies uncertain, European calls for speedy action are also unlikely to be realized, a number of analysts say.
“Nicolas Sarkozy is a man in a hurry. But the United States will be unable to say anything because the [presidential] elections have just taken place. And it’s not sure that China or India or other countries will have a clear line in Washington” next week, said Philippe Moreau Defarges, senior research fellow at the French Institute of International Relations, in Paris.
“That’s why I think, as we say in French, [the meeting] will be a shot in the dark,” he added.