LONDON (AP) - Leaders of rich and developing countries are arriving at the Group of 20 summit in London, where they will seek to bridge divisions on how to fix the global economy.
British Prime Minister Gordon Brown greeted President Barack Obama and other leaders at London’s ExCel conference center ahead of a breakfast meeting Thursday.
Obama has urged European governments to spend more to get the economy going. But France and Germany have resisted, saying the focus must be on tighter financial market regulation.
Obama and British Prime Minister Gordon Brown, the summit’s host, say they are confident a strong agreement will be reached.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
LONDON (AP) _ World leaders headed into the Group of 20 summit talks Thursday seeking to forge a new global deal for economic recovery amid divisions between the United States and European governments on tightening regulation to curb financial market excesses.
President Barack Obama and British Prime Minister Gordon Brown, the host of the summit at a conference center in London’s Docklands district, have expressed optimism that the meeting of leading rich and developing countries will find consensus.
But France and Germany have warned that they will not agree to “false compromises” that soft-pedal the need for tougher financial regulation to keep the financial crisis from happening again, and have refused U.S. calls for more government spending to stimulate the economy.
Obama has acknowledged that U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying “We can only meet this challenge together.”
He added that differences in the grouping had been “vastly overstated” and downplayed an earlier U.S. push for bigger government spending by European governments, praising their efforts instead.
Brown foreshadowed agreement on issues including a possible $100 billion boost in financing needed to keep global trade moving, and support for economic growth and job creation. G-20 leaders are also in general agreement on a plan to boost the funds available to the International Monetary Fund to help out emerging countries.
But consensus on tougher regulation was by no means clear, and French President Nicolas Sarkozy and Germany Chancellor Angela Merkel had their feet dug in against running up more government debt with stimulus. Sarkozy, who had earlier implied he might walk out of the meeting if key demands on tightening regulation were not met, presented a more conciliatory stance at a joint press conference with Merkel after arriving in London on Wednesday, saying he had “confidence in Obama.”
However, he also warned that neither France nor Germany would align with any “false compromises” and that the two European countries considered concrete steps on tax havens, hedge funds and ratings agencies as “red lines” in the negotiations.
European governments say their stimulus packages can be smaller because they will eventually spend more money through their more generous social welfare programs such as unemployment insurance.
Several thousand people protested, some breaking windows and throwing objects at police, in London’s financial center on Wednesday, as leaders held pre-summit one-on-one meetings and attended an evening reception for heads of state at Buckingham Palace. Obama then chatted informally with Merkel at the leaders’ dinner of slow-roasted Welsh lamb put on by celebrity chef Jamie Oliver
The standoff had led to lower expectations of what could be achieved at the London summit, even with global trade plummeting, protectionism beginning to make inroads and unemployment rising.
Another concern for leaders is the plight of developing countries, amid growing fears that the heavy toll exacted by the global economic crisis on those nations could come with heavy human and political implications. U.N. Secretary-General Ban Ki-moon has written to leaders to urge them to approve a $1 trillion stimulus plan for developing countries and back away from damaging anti-trade policies.
In their meeting in November, the G-20 members vowed to avoid protectionism that could stifle trade. But since then, 17 have acted to pass subsidies to protect their own industries or limit imports, according to the World Bank.